FX168 Financial News (North America) News The US stock market recently experienced its first sharp decline in half a year, and many Wall Street analysts describe this as a broad correction that is long overdue. After a few weeks of fluctuation, the S&P 500 index fell 5% from its closing high on March 28, the biggest drop since October 2023. Goofy's chip stocks are no exception. Shares of artificial intelligence darling Nvidia experienced double-digit declines earlier this week. #2024投资策略 #
However, after big tech companies, particularly Meta Platforms, Alphabet, and Microsoft, released their long-awaited quarterly earnings reports, there was some relief in the hardware technology sector.
On Friday (April 26), after the company easily surpassed analysts' estimates for the first quarter of fiscal year 2024, the stock price of Google's parent company surged more than 11% in pre-market trading, and its cloud computing division showed significant strength. The company's revenue increased 28% year over year to US$9.6 billion, while operating profit rose to US$900 million.
One highlight of the report was Alphabet's capital expenditure, which soared to $12 billion in three months. Ruth Porat, the company's chief financial officer, expects to see this number repeated this year.
“Our reported capital expenditure for the first quarter was $12 billion, again driven mainly by investments in technology infrastructure, with servers being the largest component, followed by data centers,” Borat said. “The significant annual increase in capital spending in recent quarters reflects our confidence in the opportunities artificial intelligence brings to our business.”
Commenting on Alphabet's strong report, UBS analysts said, “The $12 billion capital expenditure that far exceeds expectations will benefit NVDA and other semiconductor artificial intelligence/hardware companies.”
Nvidia shares rose nearly 5% on Friday.
Facebook owner Meta Platforms has also raised its 2024 spending forecast to expand investments in new artificial intelligence products and the infrastructure that underpins it.
The company added that spending is expected to continue to rise in 2025 as well. The social media giant raised its total spending forecast for 2024 to $96 billion to $99 billion, up from the previous range of $94 billion to $99 billion.
Additionally, the company now anticipates capital expenditure for 2024 to be between $30 billion and $40 billion, higher than the previous forecast of $35 billion to $37 billion.
Furthermore, the new inflation report released on Friday was broadly in line with Wall Street's expectations, further boosting the US stock market.