US stock markets: between Nvidia's climb, quarterly reports and AI costs
Financial markets/economy
Posted by MoneyController on 04.11.2024
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An update on some of the latest movements on the US stock markets of some of the big tech companies.
It has been a particularly positive third quarter for some of the big US tech companies: Amazon, Apple, Google (Alphabet), Meta, Microsoft and Netflix have all reported close to USD 100 billion in earnings. As Vittorio Carlini (‘Il Sole 24 Ore’) points out, revenues also recorded a very similar percentage increase, compared to the previous year: just under USD 459 billion (an increase of about 12%). Despite these results, not all companies were rewarded on the stock exchange; this is the case with Microsoft and Meta. How come such positive results?
One of the other indicators that Wall Street keeps a close eye on is expenditure, namely the so-called Capex (‘capital expenditure’). As Pierangelo Soldavini (‘Il Sole 24 Ore’) writes, the Capex of Amazon, Google, Meta and Microsoft has reached 60 per cent. But where does all this money go? The answer is that 80% of these investments,' Soldavini continues, ’go into data centre infrastructure for artificial intelligence (AI). The race for AI, therefore, does not stop. And the interest of the markets is such that even Apple's results, which were positive even above expectations, were not particularly appreciated by traders: as Carlini (‘Il Sole 24 Ore’) explains, the markets expect above all a change of pace precisely in the area of AI. On top of that, there are also the massive sales of Apple shares by Warren Buffett.
Meanwhile, an important change took place on the Dow Jones Industrial Average: the company Intel gave way to the semiconductor manufacturer Nvidia. While Nvidia has surpassed the capitalisation of more than $3 trillion, Intel, on the other hand, is going through a deep crisis phase: since the beginning of the year, the company has seen the value of its shares drop by half (-50%). As Massimo Basile writes, this has led the company to contemplate cuts in the billions, even to the point of announcing the dismissal of 16,500 employees. In the same period of time (since the beginning of this year), Nvidia's shares have risen 180%.
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