Shares of technology companies slid as earnings from Amazon and Intel tempered enthusiasm about artificial-intelligence prospects.
The Nasdaq 100 and Nasdaq Composite, the two key gauges of tech stocks, entered correction territory, more than 10% below their previous peaks.
Amazon.com shares tumbled after the online mega-store's second-quarter revenue growth lagged Wall Street expectations, dashing hopes about the revenue potential of AI.
"The question was one of valuations," said Quincy Krosby, chief global strategist at brokerage LPL Financial.
"Valuations were rich and the market was determined to learn about the monetization from big tech of the generative AI. The question to Amazon and other mega-cap companies investing in AI from investors is: 'You're paying billions for the infrastructure buildout. What can you show us what can you tell us...is it being monetized?'" Krosby said.
Intel plans to lay off thousands of employees this year and pause dividend payments as part of a broad cost-saving drive more than three years into Chief Executive Pat Gelsinger's turnaround effort. Intel is scrambling to close the gap on formerly junior rivals such as Nvidia, which has dominated the supply of AI semiconductor technology.
Nvidia shares fell about 7% for the week, and entered bear-market territory, more than 20% below their 52-week high.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
08-02-24 1737ET
