By Callum Keown
Tech stocks were struggling to keep their recent momentum going early Tuesday.
The technology-heavy Nasdaq Composite Index was flat in early trading after closing 1.2% higher Monday to notch its third consecutive day of gains. A fourth winning day is in the balance, though.
Palantir Technologies wasn't helping the market's cause as the stock tumbled 13% after the data analytics software company reported earnings late Monday. The bar was high as the shares have surged 240% over the past year. A deceleration in U.S. commercial revenue to 40% from 70% in the December quarter may also be concerning investors. Rival analytics-software firm Snowflake was also being dragged down, falling 2.8%.
Datadog was another tech company disappointing investors in early trading despite beating earnings and revenue estimates. The security software provider's stock fell 12.2%.
The Magnificent 7 stocks also couldn't provide any assistance for the broader market. Nvidia and Tesla were both more than 2% lower, while Meta Platforms and Microsoft stocks also fell. Amazon and Alphabet gained. Apple was the group's best performer in early trading, rising 1.4% following a Wall Street Journal report that it has been developing its own AI chips for data center servers.
Catalysts were in short supply for the rest of the Big Tech sector. Amazon said it plans to spend $9 billion over the next four years to grow its cloud-computing infrastructure in Singapore. It follows a series of announcements by Microsoft to boost its AI footprint in Southeast Asia over the past week. Amazon's new investment failed to excite investors, as the stock pointed 0.5% lower ahead of the open.
Nothing seemed to be able to wake the tech sector from its slumber early Tuesday. Advanced Micro Devices and Cloudflare were both upgraded to Buy from Hold by DZ Bank analysts, yet the stocks fell.
Write to Callum Keown at callum.keown@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 07, 2024 10:06 ET (14:06 GMT)
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