(Reuters) – The market capitalization of big technology companies fell in August on concerns that rising artificial intelligence (AI) infrastructure costs and growing risks of a recession would weigh especially on their stock prices during a market correction.
Alphabet’s market capitalization fell 4.7% last month as slowing advertising sales at YouTube sparked concerns about its profitability. A U.S. court ruling that Google violated antitrust laws and the emergence of a new competitor, OpenAI, which is developing a prototype AI-based search engine, also contributed to the decline in the company’s shares.
Amazon.com Inc.’s market capitalization fell 4.5% as online sales slowed.
Tesla’s market capitalization fell 7.7% last month after it reported weak second-quarter profits and reports that Canada plans to impose new 100% tariffs on Chinese-made electric vehicles.
The world’s largest automaker began exporting electric vehicles made in Shanghai to Canada last year, but the Canadian government’s plans raised concerns about the potential impact on profits from exporting from higher-cost U.S. production bases.
Meanwhile, Nvidia’s market capitalization fell 7.7% in the last week of August to $2.92 trillion after the company reported third-quarter gross profit that fell short of market expectations but revenue that met expectations, disappointing investors who had been hoping for stronger results.
With more than 80% of the AI chip market, Nvidia is uniquely positioned to be both the biggest driver and beneficiary of burgeoning AI development.
On the bright side, US drugmaker Eli Lilly’s market capitalization soared nearly 20 percent, making it the market’s top gainer, thanks to strong sales and the launch of a weight-loss drug that significantly reduces the risk of developing type 2 diabetes in overweight adults.
Berkshire Hathaway’s market capitalization surpassed $1 trillion for the first time in late August, reflecting investor confidence in the conglomerate that Warren Buffett built over nearly six decades and is considered by many to be synonymous with the U.S. economy.
Meta’s market cap also rose nearly 10% after it beat market expectations in the second quarter and forecast strong revenue growth in the July-September quarter, suggesting that strong digital ad spending on its platform could help offset the costs of its AI investments.
(Reporting by Paturaja Murugaboopathy and Gaurav Dogra in Bengaluru; Editing by Tomasz Janowski)
