AI companies lose $190 billion in market cap after report from Alphabet and Microsoft

By Noël Randewich

(Reuters) – AI-related companies lost $190 billion in stock market value late on Tuesday after Microsoft, Alphabet and Advanced Micro Devices reported quarterly results that failed to impress investors who had sent their shares soaring.

The sell-off following the tech giants’ reports after the bell underlined investors’ high expectations following an AI-powered stock market rally in recent months, which pushed their shares to record highs on the promise of integrating the technology across the business landscape.

Alphabet fell 5.6% after its Google parent company’s ad revenue beat expectations in the December quarter.

Alphabet also said spending on data centers to support its AI plans will increase this year, highlighting the costs of its fierce competition against AI rival Microsoft.

While Google Cloud’s revenue growth slightly exceeded Wall Street targets, boosted by interest in AI, Microsoft’s Azure grew faster.

Microsoft beat analysts’ expectations for quarterly revenue as new AI features helped lure customers to its cloud and Windows services. However, the stock fell 0.7% in extended trading after briefly hitting an intraday record high earlier on Tuesday.

Optimism about AI pushed Microsoft’s stock market value above $3 trillion this month, eclipsing Apple.

Chipmaker Advanced Micro slumped 6% after its first-quarter revenue forecast missed expectations, even as it forecast strong sales for its AI processors.

Nvidia shares, which rose 27% in January after more than tripling last year on AI optimism, have also given back some of those gains in extended trading, down more than 2%.

Server maker Super Micro Computer, another company that has benefited from…

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