Google’s parent company, Alphabet and Tesla, shared their earnings reports on Tuesday, leading to a big slump in the prices of these companies’ stocks. It has significantly affected the S&P 500 and the NASDAQ composite. Both indexes saw the most decline in a single day since 2022. The border index, S&P fell 2.31% to 5,427.13, while the tech-dominated NASDAQ composite fell 3.6% to 17,342,41. This marked the biggest drop for both the indices since 2022.
Shares of Alphabet fell 5%, the most they have fallen since Jan 31. The primary reason behind this is, the revenue earned from YouTube ads wasn’t as much as experts expected. Tesla on the other hand saw a massive 12.3% decline in their stock prices. The reason for this is the decline in the company’s auto revenue.
This trend was not limited to just Alphabet and Tesla but was also followed by Nvidia, Meta and Microsoft, whose shares fell 6.8%, 5.6% and 3.6%, respectively.
A tech analyst at Wedbush Securities, Daniel Ives, expressed his view and said that investors were expecting “perfection” from these tech giants’ earnings reports. Therefore, these companies are witnessing this sell-off. He further added, “Investors are negatively reacting to any whiff of softness that we see from these big tech players. I think it’s an overreaction after a massive run in tech stocks.”
However, investors and experts are optimistic about the stock market of the USA. This is mainly because out of all of the S&P 500 companies, around 25% have reported their second-quarter earnings and around 80% of them have reported better revenue than expected. Moreover, experts believe that the tech giants will also recover as AI is poised to make a big impact on the world and these companies are the ones leading the evolution of AI.
