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USequitiesopenedhigherFridaymorning,clawingbacksomeofThursday’slossesthatsawtheNasdaqCompositeandS&P500indexesdrop1.8%and1.2%,respectively.
Theselloffwasledbytechstocks,triggeredbydisappointingoutlooksfromgiantsMetaandMicrosoft,bothofwhichreportedafterthecloseyesterday.
BothMetaandMicrosoftbeatexpectationsonsomeearningsmetrics,butyouwouldn’tknowthatlookingattheshareprices.AnalystsattributeThursday’sdrops(-4%forMicrosoftand-3%forMetaduringafterhourstrading)todisappointingprojectionsfrombothcompanies.
Microsoftexecsestimatebetween$68.1billionand$69.1billioninrevenueforQ4,missingWallStreet’sforecastof$69.83billion.Thetechgiantanticipatesitscloudcomputingplatform,whichsawa33%increaseinquarter-over-quarterrevenueduringQ3,willslowduringthefinalmonthsofthisyear.
Metasimilarlybeatonearningspershareandrevenueforthethirdquarter,butexecssayitsspendingspreeisgoingtocontinuethroughtheendof2024.Theycalculatecapitalexpendituresfortheyeartocomeinbetween$38billionand$40billion.Thisisupfromtherangegivenduringthecompany’slastquarterlyearningsreport.Metaisalsoforecastinga“significant”increaseinAI-relatedinfrastructureexpensesin2025.
TomEssaye,founderofSevensReportResearch,saiditwasn’tjustBigTechweighingonequitiesThursday.Earningsacrosstheboardweredisappointing(lookingatyou,Uber,EbayandIntercontinentalExchange),pluseconomicdatalookslikewemayseehigherratesforamoresustainedperiodoftime.
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