Trouble increased for tech companies, Microsoft earned huge profits from Ai, shares surged

Microsoft has recently released its earnings report. The number of US tech giants declined on Wednesday as results from Microsoft signaled how the battle for AI supremacy would cost the tech giant, which has seen its shares rally in recent months due to the technology's hype.
Microsoft shares fell 3.6 percent in early trading as the company laid out an aggressive AI-related spending plan, saying it needed deeper investment in AI before profits hit the bottom.
Microsoft is set to shave off around $100 billion (roughly Rs. 8,20,100 crores) from its market capitalization if the losses continue till the close of trading. Its shares had gained 46.4 percent till yesterday's close.
AI will generate a lot of revenue and earnings for such companies, but a lot of investors have been believing the rumor and now that we have the earnings, they're taking profits, said Paul Nolte, senior wealth advisor, and market strategist at Murphy & Sylvest. Are.
He also said that there is still a lot of excitement around AI, but no one understands what it means to the bottom line of many of these companies.
The NYSE FANG+ index, which includes several mega-cap growth names, was down 0.2 percent. The craze for AI has led the index to rise nearly 76 percent so far this year.
Shares of Google-parent Alphabet rose 5.6 percent after its second-quarter results were better than expected. Alphabet looks set to add about $100 billion to its market capitalization.
The recent rally has boosted Microsoft's valuation. The stock is trading at 31 times trailing 12-month earnings, which is more than 20 times Alphabet's PE. The tech earnings season started on a mixed note, Mark Haefele, global wealth management chief investment officer at UBS, said in a client note.