US tech stocks tumbled in after-hours trading after some of the industrys biggest companies reported disappointing results.Google parent Alphabet Inc.
fell as much as 7.4% after third-quarter revenue came in below expectations, while software giant Microsoft Corp.
lost 8.1% following a disappointing revenue forecast.
Texas Instruments Inc., a bellwether for the semiconductor industry, tumbled 6.1% after giving a forecast that was weaker than analyst estimates.Adding to the gloom, South Korean chipmaker SK Hynix Inc.
reported a 60% decline in profit and said it would cut capital expenditures by more than half.
It warned of an unprecedented deterioration in market conditions.The plunge in US tech stocks came after the Nasdaq 100 Index jumped to its highest level in a month during regular trading.
The Invesco QQQ exchange traded fund, which tracks the tech-heavy benchmark, dropped as much as 2.1% in after-hours trading while Amazon.com Inc.
fell 4.9%.The selloff in extended trading was broad-based.
Those that derive sales from online advertising followed Alphabet lower, with Meta Platforms Inc.
and Pinterest Inc.
dropping more than 4% each.
Among software companies moving in the wake of Microsoft, Datadog Inc.
tumbled 7%, Snowflake Inc.
fell 5% and Salesforce Inc.
dropped 3%.
In the chip space, Analog Devices Inc., ON Semiconductor Corp., and Marvell Technology Inc.
also dipped.Signs of weakness were widespread in the financial results.
Microsoft posted its weakest quarterly sales growth in five years, throttled by the surging U.S.
dollar, slumping PC demand and faltering advertising revenue.
At Alphabets most important financial engine, the search and related businesses, sales fell shy of analyst estimates as spiraling inflation crimped growth in digital advertising.Pessimism is growing in the semiconductor industry, which had been one of the hottest sectors during the pandemic.
Texas Instruments, whose chips go into everything from home appliances to missiles, saw its shares tumble after its weak forecast signaled that the chip slump is spreading beyond computing and phones into other businesses.Hynix is joining fellow memory makers Micron Technology Inc.
and Kioxia Holdings Corp.
in slashing production plans as chip prices tumble.
That pullback may ultimately prove beneficial for profits -- and stock prices.Chip shares start to rise once there are actions from memory makers to cut output, said Greg Roh, head of technology research at HMC Investment - Securities.
Inventory will decrease accordingly and demand will rise again.
I think the market has already reflected the anticipation for the market recovery already.