Tech investors are feeling the pressure after a disappointing earnings report from Meta Platforms Inc. sent shockwaves through the market. The tech giant’s weaker-than-expected sales forecast and increased capital expenditures caused a massive selloff, wiping out $400 billion in market value from the Nasdaq 100 Index.
Meta’s shares plummeted by as much as 16%, while other tech giants like Alphabet Inc. and Microsoft Corp. also saw significant drops of over 5%. Amazon.com Inc. followed suit with a nearly 6% decline ahead of its upcoming earnings report.
Investors had high hopes for Meta’s use of artificial intelligence to drive growth, but the lackluster revenue forecast has raised doubts about the returns on these investments. Analysts are now questioning whether expectations for other Big Tech companies are too high.
The disappointing results from Meta have also cast a shadow over the broader AI trade, with analysts wondering why the company couldn’t meet expectations despite its focus on AI technology.
The tech sector as a whole took a hit, with International Business Machines Corp. and ServiceNow Inc. also reporting disappointing earnings and seeing their shares tumble.
Despite the losses, some analysts and investors see this as a buying opportunity, viewing the market downturn as a chance to enter at attractive price points.
As the tech industry braces for more earnings reports in the coming days, all eyes will be on how companies like Alphabet, Microsoft, and Amazon perform in the wake of Meta’s disappointing results.
