Tech stocks were set to start May on the back foot after a series of disappointing corporate results as investors woke up with a hangover from a tough end to April.
Nasdaq 100 futures fell 0.6% early Wednesday as technology stocks rose.
Nasdaq Composite Index
It fell 2% on Tuesday, capping off its worst month since September 2023.
Wednesday’s economic data had a negative impact on stock markets, with the employment cost index rising more than expected (the fastest pace in a year) and pointing to solid inflation. Consumer confidence index fell more than expected.
Even after the market closed, major high-tech sector earnings rose sharply, but this had little effect on boosting sentiment. Supermicrocomputer stock fell 9.2% despite the AI server maker’s solid outlook. The hurdles were very high for the company, as the stock is up 202% in 2024 and more than 700% in the past year.
The sharp rise in the stock price meant sales were up 200% year-on-year, still disappointing investors. Sales were $3.85 billion, lower than analysts’ mid-term estimates of $3.99 billion. The company also raised its full-year sales and profit forecasts, both of which now exceed expectations.
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Following Supermicro’s results, KeyBanc analyst Thomas Blakey raised his profit and revenue forecasts, citing the company’s “strong record order backlog.” But he said the stock “balances risk and return at current levels” and maintained its sector-weight rating.
Perhaps the broader market feels that way, too, given the meteoric rise in stock prices over the past year.
Shares of Advanced Micro Devices also fell after late Tuesday’s results, dropping 5.6% in premarket trading. The chipmaker’s earnings and outlook matched expectations, but investors likely expected more.
Pinterest stock was far more positive on Q1 results, with shares up 16.4% ahead of the rally. The social media platform reported smaller-than-expected losses and revenue of $740 million, comfortably beating FactSet’s forecast of $700 million.pinterest
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The company also announced that its platform surpassed 500 million monthly active users in the first quarter, marking the fastest user growth rate since 2021.
Amazon
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Shares rose 1.8% in early premarket trading after the tech giant beat profit estimates on strong performance from its AWS cloud computing business.
Email Callum Keown at callum.keown@barrons.com.
