The technology-laden Nasdaq index is down more than 500 points after earnings from Meta Platforms (META) and Tesla (TSLA) shook confidence in the artificial intelligence (A.I.) trade.
The Nasdaq Composite index is down 515 points premarket on Oct. 22 as investors digest the latest prints from two of the so-called “Magnificent 7” mega-cap technology companies.
The other major U.S. indices, the S&P 500 and Dow Jones Industrial Average, are each down close to 1% following the results from Meta and Tesla.
Tesla and Meta Platforms’ stocks are each down 3% ahead of the market’s open after the initially positive response to the companies’ financial results turned negative overnight.
Electric vehicle maker Tesla reported earnings per share (EPS) of $0.48 U.S., which beat the $0.43 U.S. consensus estimate among analysts.
Tesla’s revenue in the year’s third quarter totaled $28.05 billion U.S., which topped the $27.90 billion U.S. that had been expected.
However, Tesla’s core automotive business declined 3% from a year earlier to $20.56 billion U.S. The company’s energy revenue fell 16% year-over-year to $2.88 billion U.S.
As for Meta Platforms, the social media giant reported EPS of $3.83 U.S., which badly missed the consensus expectation on Wall Street for $5.75 U.S.
The profit was impacted by a $9.89 billion U.S. one-time legal charge to settle a child-safety legal case with multiple U.S. states.
Revenue in the latest quarter totaled $64.60 billion U.S., which beat the $63.37 billion U.S. forecast on Wall Street. Meta’s sales were up 26% from a year earlier.
Hours before Meta’s latest financial results were released, the company was ordered to pay a $25 billion U.S. fine in connection to the Cambridge Analytica scandal in New Mexico.
The penalty comes after a jury in a Santa Fe, New Mexico found Meta liable for misleading state citizens about how it safeguards and collects user data.
While investors initially cheered Tesla and Meta’s results, sentiment has since turned negative. Each company continues to spend heavily on A.I.
Also impacting markets on Oct. 22 are higher crude oil prices. Media reports say the U.S. and Israel plan renewed strikes on Iran following next month’s midterm elections in America.
Brent crude oil, the international standard, is up 3% and trading at $111.89 U.S. per barrel.
Over the last 12 months, META stock has declined 5% to trade at $697.52 U.S. per share. TSLA stock has fallen 12% in the past year to trade at $386.47 U.S. a share.
Related Stories
