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Tech trade after Nvidia earnings grows more segmented
Alphabet shares have fallen 15% from their May all-time high, removing about $692 billion in value amid concerns over AI infrastructure spending.
After Nvidia’s earnings sent a signal that AI demand remains strong, Yahoo Finance reports the tech trade has started to look more segmented, with different parts of the sector reacting in sharply different ways.
Yahoo Finance cites Steve Koenig of Macquarie as saying investors are focusing on which software and services names can “accelerate,” and that stocks able to sustain that momentum are being rewarded.
Even inside the “Magnificent Seven,” Yahoo Finance notes divergence, with Alphabet moving lower while other leaders held up, and describes Alphabet’s pullback as tied to cautious views of its infrastructure investment plans and concerns that it is losing its edge.
The article also warns that financing for the AI build-out could create winners and losers, with some investors pointing to the risk that unprofitable projects may ultimately shift the cost to debtholders as hyperscalers’ capex is expected to exceed $1 trillion in 2027, according to Yahoo Finance.