The financial report phenomenon of the Seven Sisters of Technology: The market does not care about how to make money, only how to spend money

Reprinted from: Wall Street Insights Recently, Microsoft, Google, Meta and Tesla among the Seven Sisters of the US stock market have successively announced their first-quarter results.

Reprinted from: Wall Street News Recently, Microsoft, Google, Meta and Tesla, among the Seven Sisters of the US stock market, have successively announced their first-quarter results.
Among them, three companies reported profits and sales that exceeded Wall Street\’s expectations, while the fourth company\’s performance fell significantly short of expectations.
However, investors have little reaction to these direct financial results. They are more concerned about the future investment and spending plans of these four companies, not just their current profits.
Data shows that these four companies have a combined cash reserve of US$275 billion. This part of the funds can be freely used for various investments and the development of new technologies.
Overall, the demand for AI infrastructure is very strong. These companies have generally revised up their AI capital expenditures: • META: Full-year capital expenditures have been raised from 300-370 to 350-400 to build data centers to support AI business; • Google Google: It expects capital expenditures in each quarter of 2024 to be more than US$12 billion, with a year-on-year growth of at least 49% to maintain its leading position in AI infrastructure; Microsoft: stated that the demand for computing power cards exceeds the supply and decided to expand AI investment scale. Capital expenditures this quarter are 14 billion (expected 13.14 billion). Capital expenditures are expected to increase significantly quarter-on-quarter in the next quarter; these companies\’ statements on future spending plans directly triggered significant fluctuations in stock prices.
Meta, in particular, announced it will increase its investment in AI infrastructure by up to $10 billion this year.
The news caused its stock price to fall by 11%, the largest one-day drop since October 2022.
Although Microsoft has also invested heavily in the field of AI, its stock price has also been affected. However, it quickly recovered after announcing its financial results.
Dan Morgan, portfolio manager and analyst at Synovus Trust, said: Meta, Microsoft, Tesla and Google had a combined cash balance of $275 billion at the end of the first quarter.
Investors are putting pressure on these companies\’ use of cash. They are focused on how companies use their vast cash piles to make strategic acquisitions and whether they can get good returns on their investments.
Investors don\’t want these companies to spend large amounts of money on projects that ultimately don\’t come to fruition.
Some analysts pointed out that investors are paying close attention to the spending plans of giants. Part of the reason is that the investment decisions of these companies can directly affect the direction of the stock market.
According to data from S&P Dow Jones Indices, the Seven Sisters of U.S. stocks account for nearly 30% of the market value of the S&P 500 Index. And they have contributed more than 40% to the index\’s year-to-date returns.
Therefore, investors pay great attention to their every financial action and plan.
On the other hand, the reason is that investors are gradually losing patience in the face of weakening expectations for interest rate cuts by the Federal Reserve and overvaluation of technology stocks.
At the start of the year, markets were optimistic that the Federal Reserve could cut interest rates soon. But that optimism has waned in recent weeks as inflation data showed things were tougher than many investors expected.
At the same time, against the backdrop of continued high valuations of technology stocks, investors\’ patience is being tested.
Bob Doll, chief investment officer of Crossmark Global Investments, said: Investors have limited patience with highly valued technology stocks. They expect quick returns.
While the bull market in tech stocks remains solid, investors have made it clear they are raising the bar.
In the coming days, investors will turn their attention to the performance of the other members of the Seven Sisters.
Amazon is scheduled to report earnings next Tuesday. Apple will report on Thursday. And Nvidia will report on May 22.
In addition, they will also focus on the Federal Reserve\’s policy decision next Wednesday and Chairman Powell\’s press conference to assess the possibility of a rate cut in the short term.

Like (0)
Previous April 27, 2024 7:58 pm
Next April 29, 2024 4:07 pm

Related posts

  • Luminar once rose more than 11% before the market opened. Tesla purchased more than $2 million worth of lidar in Q1.

    Gelonghui, May 8 | The U.S. stock price of lidar company Luminar (LAZR.US) rose by more than 11% before the market opened, at $1.84.

    US stock market May 8, 2024
  • F&O Strategy: GAIL (India): Bull call spread

    The stock of GAIL (India) (₹221.83) finds an immediate support at ₹209. A major support is at ₹166. The short and long-term outlook appears bright. If the current trend sustains, the stock has the potential to reach ₹261 and for that it should not break ₹194. We expect the momentum to continue for GAIL (India).

    US stock market June 18, 2024
  • It broke on the first day of listing! \”AIGC\’s first stock\” goes out to ask: Where is the way?

    For stock trading, please read Jin Qilin analyst research reports. They are authoritative, professional, timely and comprehensive, helping you to tap potential theme opportunities! Source: Financial Investment News Financial Investment News reporter He Menglu When AIGC (generative artificial intelligence) became a global focus, Mobvoi Co., Ltd. (hereinafter referred to as: Mobvoi) followed the trend and actively embraced the capital market. On April 24, Mobvoi (02438.HK) officially landed on the Hong Kong Stock Exchange, completing its gorgeous transformation from a \”star company\” to \”the first AIGC stock\”. It passed through the AI ​​development cycle and finally knocked on the door of capital. However, it suffered a break in the first day of listing, causing industry insiders to worry about its future. The IPO broke on the first day of listing. The prospectus shows that Mobvoi is an AI company with generative AI and voice interaction technology as its core business. The CIC Consulting Industry Report shows that in terms of revenue in 2022, Mobvoi ranks third in China\’s AI voice technology and natural language processing software solutions, with a market share…

    US stock market April 25, 2024
  • Nordisk fell 1.1% in premarket as the U.S. Senate launches investigation into Novo Nordisk\’s GLP-1 drug pricing

    Gelonghui, April 25 | Nord Nordisk (NVO.US) U.S. stocks fell 1.1% before the market opened, to US$124.74. On the news, U.S. Senate Health, Education, Labor and Pensions Committee Chairman Bernie Sanders said on Wednesday that the committee is launching an investigation into Novo Nordisk\’s pricing. In a letter sent to Novo Nordisk\’s CEO on Wednesday, Sanders asked Novo Nordisk to provide \”internal communications about the U.S. pricing of the drug\” and explain why Ozempic and Wegovy have the same ingredient (semaglutide). ), Wegovy’s pricing is obviously more expensive. Sanders stressed that the price of GLP-1 drugs \”must come down\” so that consumers can afford them and the government doesn\’t go bankrupt by reimbursing them.

    US stock market April 25, 2024
  • Buzzing stocks.Stocks that will see action today: May 17, 2024

    Two top executives of PB Fintech are planning to sell some portion of their stake in the company for ₹1,053 crore through block deals with a floor price of ₹1,258 per share, a 6 per cent discount to the closing share price on Thursday. According to the term-sheet seen by businessline, Yashish Dahiya and Alok Bansal will be selling 54 lakh shares and 29.7 lakh shares respectively, cumulatively representing 1.86 per cent equity of the fintech. According to the shareholding pattern at the end of March 2024, Dahiya held 4.63 per cent stake or 2.1 crore shares in the company, while Bansal held 75.4 lakh shares or 1.67 per cent stake

    US stock market May 17, 2024
  • Strides Pharma Science’s shares rise 1.64% on USFDA approval

    Strides Pharma Science Limited’s shares rose 1.64 per cent after the company announced that its subsidiary, Strides Pharma Global Pte Limited, Singapore, received approval from the USFDA for Sevelamer Carbonate Tablets, 800 mg.

    US stock market May 10, 2024