Motley Fool Money Big Tech Bets on “Overinvesting”
Aug 2, 2024
Ron Gross and Matt Argersinger dive into big tech's massive spending on cloud capabilities and AI growth. They discuss why recent job numbers surge hints at a potential rate cut in 2024. Intel's shocking dividend cut raises historical concerns, while Apple and Meta remain resilient amidst a tough earnings season. With Amazon, Microsoft, and Alphabet investing $45 billion this quarter, they analyze the market's cautious reception of these ambitious moves. Plus, insights into Mercado Libre and Designer Brands make for a compelling stock conversation.
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Recession Indicator Triggered
- The SOM rule, a recession indicator, triggered last month, suggesting a potential recession.
- Job growth slowed, and jobless claims increased, raising concerns about the Fed's interest rate policy.
Market Performance and Optimism
- Despite recent market declines, major indexes like the S&P 500 and Nasdaq are still up for the year.
- Ron Gross expressed optimism about the economy, citing moderating inflation and good employment figures.
Intel's Struggles and Dividend Suspension
- Intel announced plans to cut 15,000 employees and suspended its dividend, leading to a significant stock drop.
- CEO Patrick Gelsinger's previous statements about a turnaround and stable dividend now lack credibility.