Stocks were under pressure Thursday, weighed by the latest batch of corporate earnings as two Dow members are set to drop by more than 10%.
The Nasdaq Composite shed 1.4%, while the S&P 500 slipped 0.5%. The Dow Jones Industrial Average lost 296 points, or 0.6%.
Shares of Alphabet fell sharply as rapid growth in the Google parent’s new artificial-intelligence cloud segment failed to overcome disappointing results elsewhere in the business.
Google is trying to execute an ambitious data-center buildout that establishes Google Cloud as a leading AI cloud provider. While the early returns are solid, the costs are high: For the second straight quarter, Alphabet reported negative free cash flow, losing $9.1 billion.
ServiceNow slid as a third-quarter profit miss overshadowed a raise to its full-year subscription revenue and cash flow margin outlook.
At least ten brokerages lowered price targets on the stock, with analysts at Raymond James pointing to lagging subscription revenue and backlog growth, while AI initiatives are yet to materialize.
Fortinet was down 26% and was the top decliner on Wall Street's benchmark index. The company raised its annual results expectations. However, analysts pointed to decelerating revenue growth in its services unit, reflecting a high bar set for the company, whose stock has rallied 119% this year.
At least fourteen brokerages cut their price targets on the stock, including Piper Sandler, Jefferies and Deutsche Bank.
Shares in Marvell Technology were dropping. Shareholders look to be upset about the company’s reported interest in a shock acquisition of optical-networking peer Lumentum Holdings, Marvell and Lumentum are reportedly in advanced acquisition talks, with an announcement possible as early as next week.
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