Google-Parent Alphabet, Tesla See Gains As Microsoft, Meta, More Tech Giants Fail To Cope With AI Doubts

The plunge was exacerbated by a lower-than-anticipated revenue forecast and mounting expenses attributed to the burgeoning costs associated with advancing AI technologies.

The market capitalisation of tech titans experienced significant declines in the tumultuous month of April, driven by waning investor optimism towards artificial intelligence (AI) and a recalibration of expectations regarding central bank interest rate policies, reported Reuters.

Microsoft, one of the foremost players in the tech realm, witnessed a staggering downturn in its market value, plummeting by $232.5 billion, marking a substantial 7.4 per cent decrease and concluding the month with a valuation of $2.89 trillion. Similarly, Meta Platforms, the parent company of social media giant Facebook, grappled with a significant setback, shedding $146.8 billion, equivalent to an 11.9 per cent decline, closing at $1.09 trillion. This plunge was exacerbated by a lower-than-anticipated revenue forecast and mounting expenses attributed to the burgeoning costs associated with advancing AI technologies.

Reuters Graphics

Nvidia Corp also faced a challenging month, as its market capitalisation slid by 4.4 per cent to $2.16 trillion. The decline was propelled by a dampened outlook on the AI sector and apprehensions surrounding decelerating revenue growth among competing chip manufacturers. The company's stock further suffered a blow on Wednesday following lacklustre guidance from its rival, Advanced Micro Devices.

Meanwhile, European luxury conglomerate LVMH experienced a notable downturn in its market cap, witnessing an 8 per cent decrease to $415.1 billion. This decline was precipitated by a modest 3 per cent first-quarter sales growth, as elevated prices dissuaded consumers from purchasing its upscale products.

Reuters Graphics

In contrast to the prevailing downtrend, Alphabet, the parent company of Google, emerged as a bright spot in the tech landscape. Enjoying a remarkable 7.3 per cent surge in its market capitalisation, Alphabet's value soared to $2.02 trillion. This upward trajectory was propelled by the company's groundbreaking announcement of its inaugural dividend, a $70 billion stock repurchase program, and first-quarter earnings that surpassed analysts' expectations.

Similarly, electric vehicle manufacturer Tesla witnessed a positive trajectory in its market value, climbing by 4.4 per cent to reach $584.4 billion. The surge was fueled by the removal of regulatory barriers in China, which had previously hindered the widespread adoption of its autonomous driving technology.

As the technology sector navigates through turbulent waters, these fluctuations underscore the intricate interplay of market dynamics and investor sentiment, shaping the trajectory of industry behemoths.