The Giants Alphabet (Google) and Teslacompanies within the “magnificent seven”, presented poor balance sheets, which generated the biggest drop in two years in the high-tech company indices on Wall Street. This week they lost about $760 billion in market capitalization.
The meager quarterly revenues of Alphabet and Tesla They set off alarms and took some analysts to warn about the formation of a new bubble on Wall Street. Google and Tesla integrate the seven big tech companies together with Apple, Nvidia, Microsoft, Amazon and Meta.
Google hit forecast of heavy investment that the web search giant needs to do, while in the case of billionaire Elon Musk’s company it disappointed the lowest profit margin in five yearsa product of the continuous price reduction applied in marketing.
He Roundhill Magnificent Seven ETF (publicly traded mutual fund containing shares of these seven companies) plummeted 6% on Wednesdaythe largest daily drop on record since this index was created. One doubt behind investors’ analysis is whether the market has overestimated the role that artificial intelligence will play on the profits of technology companies.
US stocks plunged after disappointing mega-cap earnings raised doubts about the sustainability of the AI-driven bull market.
Tesla shares fell 12.3% after reporting a 7% drop in auto revenuea loss of profits and delays to the Robotaxi project.
Shares of Google parent Alphabet fell 5% due to higher-than-expected spending on artificial intelligence efforts YouTube’s already disappointing advertising revenues. For its part, Tesla reported a 7% drop in auto sales revenue.
During the first half of 2024, Rival automakers’ all-electric vehicle sales rose 33%, while Tesla’s sales fell 9.6%according to data from Cox Automotive.
Part of Tesla’s potential lies in the evolution of its humanoid robots and the implementation of artificial intelligence already applied to its vehicles, so it will be vitally important to closely monitor the evolution of this segment, industry analysts recommend.
On the New York Stock Exchange, there are fears that the worst is yet to come: all eyes are on the results presentations of the rest of the major technology companies. Meta (formerly Facebook), Microsoft, Amazon and Apple will report next week, while Nvidia will do so only at the end of August.
Source: Ambito
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