Microsoft dragged down the S&P 500 index, which includes the 500 largest companies on the American stock exchange. These are investors' reactions to the giant's latest results. As a result, the S&P 500 index lost 0.13% at the end of the day. Investors also sold shares other technology giants.
The Nasdaq Composite index also decreased (by 0.72%). In turn, the Dow Jones Industrial rose by 0.11%.
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Microsoft's stock fell after the company reported slowing growth in its cloud services in the second quarter of its fiscal year. The company also issued weak operating margin guidance for the third quarter of the fiscal year.
Share prices of a giant such as Microsoft fall by as much as 10%. this is a rare situation. The last time Microsoft experienced such a decline was at the turn of March and April 2020, almost six years ago. After Thursday's decline, the company's market capitalization fell by $357 billion, to $3.22 trillion.
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Not only Micorsoft. Shares of technology giants under pressure
The decline in share prices of software companies deepened, and investors grew fears that artificial intelligence would disrupt Microsoft's business model. ServiceNow shares fell nearly 10% despite better-than-expected fourth-quarter earnings and revenue. Shares of Oracle and Salesforce fell 2%, respectively. and 6 percent
On a positive note, Meta's shares are up 10%. after Facebook's parent company released a better-than-expected first-quarter sales forecast.
Wall Street falls. “AI is a double-edged sword”
“Artificial intelligence has become a double-edged sword here. It contributes to economic growth and spending. It contributes to valuations being what they are,” Rob Williams, chief investment strategist at Sage Advisory, told CNBC. “Now there are more and more questions about it, so it's more and more difficult for him to constantly provide positive information.”
Amid Microsoft's disappointing results, Apple is under pressure to report financial results, which are scheduled to be released after Thursday's close. Williams noted that as large-cap technology companies find it increasingly difficult to generate positive market sentiment unless they post “smashing” results, diversification will become key for investors going forward.
Source: CNBC, Bloomberg
