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US tech stocks fell sharply on Thursday after Microsoft reported a rise in data center spending, adding to investor jitters about the Silicon Valley giant’s heavy spending.
The Nasdaq Composite was down 2.2 percent in morning trading, and the broader S&P 500 lost 1.2 percent.
Microsoft fell 11 percent, leading the market, after the company reported a 66 percent year-on-year increase in its data center spending, bringing its capital expenditure to $37.5 billion in the three months to December.
The software group also reported slower-than-expected cloud growth, although adjusted net income and revenue both exceeded analysts’ expectations.
Investors expressed nervousness about Microsoft’s heavy reliance on OpenAI, after Wednesday’s results showed that 45 percent of Microsoft’s $625 billion future cloud contracts came from the ChatGate maker.
“The market is keeping an eye on Microsoft’s performance on OpenAI,” said Manish Kabra, head of US equity strategy at Societe Generale.
OpenAI is in talks to raise about $40 billion from Nvidia, Microsoft and Amazon – its three biggest infrastructure providers – in its upcoming funding round, the FT reported on Thursday, rekindling fears about circular financing in the AI ​​sector.
Oracle, which has struck a $40 billion data-center deal with OpenAI, fell 6.3 percent Thursday morning while Nvidia fell 1.6 percent.
Meta’s improved results pushed its share price 8.2 percent higher on Wednesday evening, but failed to reassure traders about the broader sector.
oil price jump Traders on Thursday reacted to US President Donald Trump’s escalating threats against Iran.
