The Nasdaq Composite Index (NDX) is down nearly 450 points or 2.37% after third-quarter financial results and guidance from several leading technology companies disappointed investors.
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The Nasdaq, which is operated by parent company Nasdaq Inc. (NDAQ), is deep in the red as investors react badly to recent earnings prints from Meta Platforms (META) and Microsoft (MSFT). Each of those stocks was down more than 4% by midday on October 31.
At the same time, the stock of Super Micro Computer (SMCI) continues to sell off, falling 14% after a 33% plunge on October 30, as an accounting scandal at the maker of high-efficiency servers appears to be worsening. Super Micro Computer led the entire chip sector down, with shares of Nvidia (NVDA) trading 5% lower at noon hour in New York.
Poor Guidance and AI Spending
While Meta Platforms and Microsoft each managed to beat analysts’ consensus forecasts with their third-quarter sales and profits, red flags were raised over their forward guidance and plans to continue spending on artificial intelligence (AI) technologies, prompting investors to reach for the sell button.
In Meta’s case, the stock took a hit after management raised their capital expenditures guidance for the current 2024 Fiscal year to between $38 billion and $40 billion, and said that they anticipate capital expenditures to continue growing in 2025.
Microsoft said it expects revenue in a range of $68.1 billion to $69.1 billion in the current quarter. That was below the $69.83 billion consensus forecast on Wall Street. Third-quarter earnings from mega-cap technology companies continue, with prints from Apple (AAPL) and Amazon (AMZN) due after the bell on October 31.
Is NDAQ Stock a Buy?
The stock of Nasdaq Inc., which runs the stock exchange of the same name, has a consensus Moderate Buy rating among 15 Wall Street analysts. That rating is based on 10 Buy and five Hold recommendations issued in the last three months. There are no Sell ratings on the stock. The average NDAQ price target of $81.47 implies 9.12% upside from current levels.
