U.S. stocks decline as Nasdaq drops 1% at one point; software stocks remain under pressure

Glonghui, February 4th｜As the wave of software stock sell-offs triggered by artificial intelligence has yet to subside, US stocks declined. The Nasdaq fell for the second consecutive trading day, at one point dropping 1%. AMD (AMD.US) plunged 14% after releasing an earnings report that fell short of expectations. Funds continued to exit software stocks as investors worried that more advanced artificial intelligence tools would pose commercial risks to related companies. Charu Chanana, Chief Investment Strategist at Saxo Bank, stated: “The market has not abandoned artificial intelligence, but is pricing it more cautiously.” Ben Barringer from Quilter Cheviot pointed out that although AMD’s performance was not bad, the company failed to deliver a stunning report card against the backdrop of previously hyped expectations for an outstanding quarter. Kathleen Brooks from XTB said that software stocks are expected to remain under pressure in the short term, but the artificial intelligence supply chain is not entirely negative, as memory and chip manufacturers will provide support. She added: “Traders are no longer betting on an entire sector as a whole, but are starting to pick specific companies they want to allocate to.”