Microsoft’s $80B AI shift: What it does to your money

Analysts have downgraded Microsoft and Amazon to neutral ratings, reflecting concerns that the generative AI boom may not replicate the success seen in the cloud computing sector. This decision comes amid weak economic fundamentals and high infrastructure costs, as noted by Redburn analyst Alexander Haissl.

Goldman Sachs has analyzed the recent earnings reports of S&P 500 companies, focusing on their discussions surrounding artificial intelligence (AI) and its implications for future growth. The examination highlights how firms are integrating AI into their strategies and the varying levels of optimism expressed during earnings calls.

US consumer confidence has declined as stock markets continue to fall and shop prices remain high. The FTSE 100 index dropped by over 1%, reaching a one-month low, while the S&P 500 also experienced a significant decline after initial gains. Concerns about an AI bubble are resurfacing, contributing to market volatility.

Global stock markets, including Wall Street and Asian exchanges, faced significant declines this week as investors expressed concerns over a potential artificial intelligence bubble and inflation uncertainties. Major indices, such as the S&P 500, experienced their worst performance in months, prompting fears of a broader market downturn.