[Closing Bell] Nasdaq Plunges 1.07% as AI Investment Concerns Weigh on Tech Stocks

Dow rose 0.41%, S&P 500 fell 0.51%... Oracle, Intel and Marvell plunge, Palantir and Apple exceed market expectations in sales after market close

The New York stock market closed mixed on the 2nd (local time). While the financial burden caused by investments in artificial intelligence (AI) infrastructure and concerns about the performance of semiconductor companies put pressure on technology stocks, stocks related to finance and consumption showed relatively strong performance. Major indexes rose in the early hours, but as technology stocks were sold, the Nasdaq and S&P 500 indexes turned downward.

On this day, the Dow Jones Industrial Average ended trading at 51,983.98, up 0.41% from the previous trading day. On the other hand, the S&P 500 index closed at 7,541.40, down 0.51%, and the Nasdaq Composite Index, centered on technology stocks, closed at 25,164.32, down 1.07%.

The main reason for the weakness in technology stocks was the financial burden caused by expanded investment in AI infrastructure. Large technology companies are investing enormous amounts of money into data centers and semiconductor facilities, but market caution is growing over whether they will be able to secure cash flow commensurate with the amount of investment. These concerns appear to have continued since the performance announcements of major technology companies at the end of last month.

In particular, Oracle announced plans to raise a total of $20 billion through the issuance of stocks and bonds. In a move to secure funds needed for large-scale investments such as expansion of AI data centers, the stock price fell more than 8% as financial burden and the possibility of dilution of existing shareholders' shares were highlighted.

In the semiconductor industry, Intel fell 8.80%, continuing the sharp decline of the previous trading day. In the results announced after the market closed on the 29th of last month, Intel presented a sales forecast for the fourth quarter that fell short of market expectations. As a result, the stock price plummeted by about 29% on the 30th. In addition, the company's forecast that it will be difficult to record positive free cash flow in 2027 also put pressure on investment sentiment.

Other semiconductor companies also fell. Micron Technology fell more than 5%, and AMD also fell by 7%. Nvidia and Broadcom also showed weakness. A selling trend occurred not only in AI semiconductors but also in memory and data center-related stocks.

Marvell Technology plummeted about 13% after announcing a deal to acquire optical components company Lumentum. The two companies are pursuing a transaction through a full stock exchange, and Lumentum's corporate value, including debt, is estimated at approximately $115 billion. Marvell plans to strengthen its high-speed connection technology for AI data centers through this transaction, but the market was wary of the possibility of diluting existing shareholders' shares due to the issuance of large-scale new shares.

Among large technology stocks, Apple fell in regular trading ahead of its earnings announcement. The impact of rising memory semiconductor prices on product costs and profitability has emerged as a topic of interest. Microsoft, Meta, and Alphabet also showed weakness. On the other hand, the stock price trends for each technology stock were mixed, with Amazon and Tesla rising.

Palantir fell during regular trading, but its third quarter results announced after the market closed exceeded market expectations. Sales recorded approximately $2.31 billion, an increase of 96% compared to the same period last year. Adjusted earnings per share (EPS) was $0.44, exceeding market expectations.

U.S. commercial segment sales increased 148% year-on-year to $984 million, surpassing U.S. government segment sales of $953 million. Palantir presented its fourth quarter sales forecast at $2.649 billion to $2.653 billion, and also raised its annual sales forecast to $8.53 billion to $8.534 billion.

Apple also exceeded market expectations in its fourth quarter fiscal 2026 results announced after the market closed. Sales increased by about 12% compared to the same period last year to $114.48 billion, exceeding market expectations of about $113.4 billion. Earnings per share (EPS) also exceeded market expectations at $2.10, and iPhone sales recorded $57.58 billion. The gross profit margin was 47.9%, which was at the upper end of the company's forecast range (47-48%), but lower than the previous quarter (50.1%).

Financial stocks performed relatively strong. Visa and MasterCard rose, and JPMorgan Chase and Berkshire Hathaway B shares also rose. In consumption-related stocks, Walmart, Home Depot, and McDonald's rose. The strength of some industries, such as finance, distribution, and restaurants, contrasted with the weakness of technology stocks, supporting the rise of the Dow.

International oil prices fell significantly as the possibility of negotiations between the United States and Iran emerged. As concerns about crude oil supply disruptions in the Middle East eased, Brent crude oil closed at $104.77 per barrel, down 7.6% from the previous trading day. In the energy sector, ExxonMobil and Chevron fell.

The market is also watching the results of the midterm elections held on the 3rd in U.S. local time. This is because the direction of fiscal spending, taxation, and industrial regulation policies may change depending on the power structure of Congress after the election.

Corporate performance and AI investment efficiency are expected to be key variables in future technology stock trends. While Palantir and Apple announced sales that exceeded market expectations, AMD is also scheduled to announce its earnings on the 3rd. The market is paying attention to whether AI-related companies can secure sales and cash flow commensurate with the expanded investment scale.