Shares of technology companies surged as concerns about the sustainability of the AI rally loomed. Giants like Microsoft, Alphabet, and Meta Platforms, known for their significant roles in the artificial intelligence frenzy, experienced stagnation or slight declines.
Chief global strategist at brokerage LPL Financial, Quincy Krosby, expressed curiosity about how the market would react to any missteps from these three companies. The stock market’s recent ascent can largely be credited to the success of these seven mega tech names, according to Krosby. However, from a more skeptical perspective, their share prices appear to be priced for perfection. While Netflix and Tesla offered some reassurance, demonstrating positive earnings, they were not without flaws.
Hence, next week presents a critical test for the AI rally’s credibility. Microsoft, in particular, will face intense scrutiny regarding the earnings potential of its new business line. It is evident that this endeavor is more than mere research, as suggested by Krosby.
Furthermore, the U.S. Federal Trade Commission has momentarily halted its in-house trial concerning Microsoft’s $75 billion acquisition bid for video game company Activision Blizzard.