Shares of technology companies slipped as traders awaited more confirmation of the revenue impact of artificial-intelligence technology.
Shares of IBM rose after the computer-services giant posted quarterly earnings ahead of Wall Street targets, bolstered by strong sales of AI tools.
Google owner Alphabet extended recent losses after reports that artificial-intelligence pioneer OpenAI was launching a test version of a search engine, which it says will cite sources of information including news from business partners such as The Wall Street Journal parent News Corp and the Atlantic magazine.
Earnings reports from Apple, Microsoft and Meta Platforms will be a "show-me" moment for the artificial-intelligence boom, said one strategist. "Like anything, when you're spending a lot of money, at some point shareholders need to see some return," said JJ Kinahan, chief executive of IG North America and president of its brokerage tastytrade. AI euphoria faded in recent sessions as the Nasdaq 100 underwent a 10% correction partly because Google parent Alphabet failed to show returns on its AI investment in its earnings report, the strategist said. "The pendulum is swinging back a bit toward the middle," said Kinahan.
"Next week is just loaded with big names ... that'll be a better sign when they report: are you seeing any return? what's all this AI investing leading you to do better."
Shares of AI bellwether Nvidia slipped and are down by more than 10% for the last month.
Uber Technologies, Lyft and other companies that depend on gig workers scored a victory with California's top court, affirming their independent-contractor model in the state, a decision that caps a yearslong legal battle over how their drivers should be classified.
Online education company 2U filed for Chapter 11 bankruptcy protection and is being taken private in a deal that will wipe out more than half of its $945 million debt.
Write to Rob Curran at rob.curran@dowjones.com
(END) Dow Jones Newswires
07-25-24 1739ET
