FMP
Feb 05, 2025
U.S. stock index futures took a dip on Tuesday evening, led by technology stocks, after Alphabet's Q4 earnings underwhelmed. The company's disappointing results raised concerns about the demand for artificial intelligence (AI), a key driver for tech stocks in 2025.
✔ S&P 500 Futures fell 0.4%
✔ Nasdaq 100 Futures down 0.5%
✔ Dow Jones Futures dropped 0.1%
Alphabet's Q4 Earnings:
❌ Revenue missed expectations, particularly from cloud services, where AI investments are significant.
❌ The slide raised questions about the profitability and scale of AI, especially with China's DeepSeek R1 AI model challenging U.S. AI spending.
Alphabet's struggles highlight concerns in the tech sector, following a broader sell-off last week triggered by questions over AI's ability to drive consistent returns. Despite their AI investments, Alphabet and Microsoft (another AI-heavy company) are facing increased scrutiny over their expenditures in the space, especially in light of China's AI developments.
While Alphabet's earnings miss may trigger further sell-offs in tech stocks, artificial intelligence continues to be a key growth area for the future. Will AI become a key profitability driver, or will competition from China put further pressure on U.S. tech valuations?
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