Investors have been pressing Google, Microsoft and Amazon to show that their huge spending on artificial intelligence will pay off. After Alphabet reported on October 28, its shares fell by double digits, wiping about $500 billion off its value, The Guardian and the BBC reported. Its net profit fell 25% to $26.2 billion while capital spending reached $51.4 billion for the quarter. On October 29, Amazon's shares fell more than 6% in after-market trading after a cautious fourth-quarter forecast, even as its cloud unit grew at its fastest rate in nearly five years.
The worry deepened on Thursday, November 5, when the tech-heavy Nasdaq fell more than 5%, wiping out more than $2 trillion in market value, according to NPR. Al Jazeera put the fall at 5.5% and said $3 trillion was wiped off S&P 500 companies. NPR and Al Jazeera linked the sell-off to investor fears that the Democrats' win in the US midterm elections will bring tougher regulation of AI and curbs on data centers. The rout spread to Asia on Friday, November 6, when Japan's Nikkei fell 6% and trading on South Korea's Kospi was temporarily halted, Al Jazeera reported.
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Alphabet shares fell by double digits, losing about $500 billion in value, and Amazon dropped more than 6% after late-October earnings, as investors press big tech firms to show their AI spending will pay off.
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