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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.
40:31
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Quick takeaways
- Major tech firms are heavily investing in cloud capabilities to position themselves for future AI growth despite market skepticism about these expenditures.
- Recent job reports indicate economic concerns and potential recession, highlighting the challenges faced by tech companies such as Intel amid restructuring.
Deep dives
Impact of Jobs Data on Market Sentiment
An increase of only 114,000 jobs, significantly below the consensus estimate of 175,000, signals economic concerns. The downward revisions to previous months' job figures contribute to worries about a possible recession, as highlighted by the trigger of the SOM rule, a recession indicator based on unemployment trends. These developments have led to cautious trading in the market, with questions emerging about the Federal Reserve's timing on potential rate cuts. The combination of stagnant job growth and the Fed’s recent decisions has left investors pondering whether a recession could indeed be on the horizon.
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Discover
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Listen to the best highlights from the podcasts you love and dive into the full episode