US tech stocks were set to fall on Thursday after overnight earnings from Google and Microsoft fuelled uncertainty over the pace of spending on building out AI infrastructure. Futures contracts tracking the Nasdaq 100 pointed to the tech-heavy index opening 1 per cent lower, while those for the broader S&P 500 were down 0.2 per cent. European stocks were set to open flat, while London’s FTSE 100 was set to open 0.2 per cent higher. Brent crude, the international oil benchmark, fell 1.2 per cent to $113.89.
The falls on Wall Street come after Google parent Alphabet reported lower than expected capital expenditure in the third quarter but still spent more than it brought in for a second straight quarter. The record cash burn alongside weakness in its core search advertising business caused the company’s shares to fall more than 10 per cent in after-hours trading on Wednesday. Meanwhile, Microsoft reported it invested less than expected in new data centres during the last quarter, blaming construction delays as its ambitious plans to meet demand from customers including Anthropic and Open AI came up against real-world constraints.
Analysts said the results showed investors were still sensitive to any signs of a negative outlook for AI from tech earnings. “Clearly risk assets, equities, are very much pivoting on any news on this front,” said Mitul Kotecha, head of Asian macro strategy at Barclays. “Markets are becoming more discerning on returns on investing in AI.”
In South Korea, shares of Samsung Electronics fell 5.8 per cent after the company’s chipmaking division, which supplies data centres, reported lower than expected operating profit. Investors were also disappointed by a lack of detail on its shareholder return programme, said fund managers. Samsung shares are down more than 30 per cent from their peak in June amid uncertainty about the sustainability of the hundreds of billions of dollars being spent on AI infrastructure.
Source: Financial Times Companies · Summarized by HeadlinesBriefing