By Callum Keown
The tech sector is losing momentum as Palantir makes a tentative attempt to rebound from Tuesday's drubbing, while Apple is the only Mag seven stock to rise in premarket trading.
Futures on the Nasdaq 100 fell 0.6% early Wednesday after the technology-heavy Nasdaq Composite Index fell 0.1% Tuesday, snapping a three-day winning streak.
The so-called Magnificent seven stocks weren't doing much to improve the mood as Tesla and Nvidia both fell sharply in premarket trading following losses in the previous session. Alphabet was 0.6% down, while Amazon, Microsoft, and Meta Platforms also fell. Only Apple was higher.
Intel stock was down 2.6% after the chip maker lowered its second-quarter revenue guidance following the U.S. Department of Commerce's decision to revoke export licenses to a customer in China. The customer is Huawei, Bloomberg reported Tuesday. The company stuck its guidance range of $12.5 billion to $13.5 billion, but said it expects revenue to be below the midpoint. Shares of Qualcomm, which is also set to be impacted according to multiple reports, fell 2.1%.
Palantir Technologies, which plunged 15% Tuesday despite stellar first-quarter earnings, looked to mount a tentative comeback. The stock pointed 0.8% ahead of the open.
Investors also were given a reminder that tech earnings can also be positive. Arista Networks rose 7.5% after issuing better-than-expected revenue guidance. The cloud-networking company also authorized $1.2 billion in share buybacks.
Reddit stock surged 14% in premarket trading after the social-media platform comfortably beat revenue expectations in the first quarter and reported weekly active user growth of 40%. The company lost $575.1 million in the quarter, reflecting costs related to the IPO.
Toast stock was 4.6% higher after the cloud-based platform for restaurants reported a 31% jump in revenue in the first quarter.
There were plenty of negative stock reactions post earnings, though, as cloud-communications company Twilio fell 7.5%, database provider ZoomInfo tumbled 23% and semiconductor company Astera Labs fell 6% despite a strong first earnings report as a public company.
President Joe Biden is set to announce a $3.3 billion investment by Microsoft to build a new artificial intelligence data center in Wisconsin, the White House said early Wednesday. It will be developed on the same site in Racine where Foxconn had originally planned to invest $10 billion following an announcement during the Trump administration before the project fizzled out.
Big Tech's global expansion is continuing as Amazon looks set to break into the European 5G market through a deal with Telefónica Germany. The German subsidiary of Spanish telecom company Telefónica will move one million customers to Amazon Web Services cloud later this month, Reuters reported.
Write to Callum Keown at callum.keown@barrons.com
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(END) Dow Jones Newswires
May 08, 2024 09:24 ET (13:24 GMT)
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