Despite posting solid quarterly profits, Microsoft (MSFT-5.36%) and meta (meta-4.52%) Stocks fell on Thursday as both tech giants signaled big spending on future AI spending. Requirements and Slower Growth Prospects. Companies that have emerged as leaders in the AI sector have seen their stock prices fall despite heavy investments in generative AI that had previously fueled investor optimism.
The downward pressure spilled over into the broader AI ecosystem, pushing down the stock prices of major semiconductor and hardware providers. Nvidia (NVDA-4.96%) fell 4.5%, Advanced Micro Devices (AMD-3.24%) fell 2.8%, Micron Technology (Mu-4.48%) fell 4.4%, while Broadcom (AVGO-4.76%) fell 4.8%. On the other hand, super microcomputers (SMCI-12.67%) faced an even sharper decline, plummeting 15%. In dispute with auditor. AI hardware company now at risk of possible Nasdaq delistingadding further uncertainty for investors.
Microsoft can’t meet the demand for AI
Microsoft (MSFT-5.36%) The third quarter financial report will be released on Wednesday evening. that He admitted that he can’t build data centers fast enough to meet the demand for AI. Richard Windsor, founder of Radio Free Mobile, said in a note that Microsoft’s “inability to build out data centers fast enough has constrained guidance for the next quarter.”
Microsoft CEO Satya Nadella said on a post-earnings conference call with analysts that the company faces external constraints due to high demand for artificial intelligence. training and inference.
“(Data centers) are not something you can build overnight,” Nadella said. “Even in the second quarter, for example, some of the demand issues that we’re having, or our ability to meet demand, are actually due to external third-party products that we were leasing ahead of schedule. That’s the constraint we have.”
The technology giant’s shares fell more than 5% in Thursday trading, trading at $409 per share. The stock is close to its worst performance in months, down nearly 2% over the past three months.
Meta is investing a lot of money in AI
Facebook’s parent meta platform (meta-4.52%) has invested billions of dollars into the artificial intelligence As it looks keep pace And that Magnificent 7 competitors. technology giant He warned that this spending is likely to increase further next year.
CEO Mark Zuckerberg gave analysts on a conference call Wednesday a hint at what some of these investments might look like, but the fourth-quarter budget is yet to be finalized. He said he would provide further details.
“First, it’s clear that there are many new opportunities to leverage new AI advances to accelerate core businesses that should deliver high ROI over the next few years,” Zuckerberg said. “So I think we should invest more there.”
“And secondly, our AI investments continue to require serious infrastructure, and I expect we will continue to invest heavily there as well,” he added.
As of Thursday afternoon, Meta stock was down 3.75%.
– Britney Nguyen and Rocio Fabbro contributed to this article
