Meta, Microsoft stocks tumble as Big Tech's AI splurge prompts investor caution

Published On Oct 31, 2024, 1:01 PM

Meta and Microsoft stocks have dropped significantly as investors express caution over the massive investments in artificial intelligence (AI) by major tech firms. This surge in spending on AI technologies has raised concerns about sustainability and profitability, leading to a sell-off in stocks of these companies. Investors are likely worried about the immediate impact of these investments on financial performance, despite the long-term potential growth in the AI sector.

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Stock Forecasts

AI prediction results, not representative of any investment advice.

META View META chart on TradingView

Negative

Given the overall market reaction to the recent AI investments and the substantial drop in stock prices for Meta and Microsoft, both companies may face further downward pressure in the short term as investor confidence appears shaken. However, if future earnings reports indicate strong returns from these AI investments, there could be potential for recovery.

MSFT View MSFT chart on TradingView

Negative

Microsoft's outlook remains affected similarly to Meta's due to investor apprehension about the financial impact of its AI strategies. A continued decline in share price is expected until there are signs of profitability from these AI initiatives.

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(Reuters) -Big technology companies including Microsoft and Meta are stepping up spending to build out AI data centers in a rush to meet vast demand, but Wall Street is hungry for a quicker payday on the billions invested. Microsoft and Meta both said on Wednesday their capital expenses were growing due to their AI investments. Amazon, which is set to report results on Thursday, is likely to echo these forecasts.