The technology sector saw a downturn as momentum shifted against the industry. Even the mega-cap tech companies, forerunners of the stock market throughout the year, have experienced significant losses in recent sessions.
Amazon.com's shares were particularly volatile during late trading. While the company reported earnings growth that exceeded Wall Street's expectations, it offered a subdued outlook for the upcoming holiday season. Similarly, Meta Platforms, the parent company of Facebook, experienced a decline in its shares due to weak digital-advertising growth.
Apple, whose earnings report is due next week, also witnessed a decrease in its stock value. "For the 'Magnificent Seven' or the 'Elite Eight,' the burden is becoming heavy on their shoulders," remarked JJ Kinahan, CEO of IG North America and president of its brokerage tastytrade. "Even Microsoft had a rough day today despite positive earnings. Some argue that the price-to-earnings multiple is already sky-high and needs to come down."
Kinahan drew parallels between the current optimism surrounding AI and previous craze surrounding electric-vehicle stocks and other trends. He emphasized that while enthusiasm for new concepts is commendable, the realization of these ideas often takes longer than expected.
In another development, Western Digital experienced a significant drop in its shares after reports revealed the termination of talks to merge the company's flash memory business with its joint-venture partner, Kioxia.