US Stock Declines as Alphabet’s Revenue Miss Sparks AI Spending Concerns

News Desk

WASHINGTON:US stock prices fell sharply on Thursday as investors reevaluated the massive spending by big tech companies on artificial intelligence (AI), following disappointing earnings reports and critical inflation data.

All three major US stock indexes closed in the red, with the Nasdaq Composite suffering a significant decline, primarily due to the poor quarterly results from Alphabet, the parent company of Google. Alphabet’s revenue shortfall, coupled with its increased cash burn related to AI investments, led to a 13.2% drop in its shares.

This downturn reflects broader concerns among investors about distinguishing between tech firms capable of funding their ambitious AI projects and those that rely heavily on borrowing. The semiconductor sector, which had enjoyed a four-day winning streak, also took a hit, dropping 2.0% as market participants reassessed their positions.

Looking ahead, analysts suggest that the market will continue to react to upcoming earnings reports and the Federal Reserve’s monetary policy decisions, which could further influence investor sentiment and stock performance.