Danske Bank says earnings of major cloud vendors reflect a negative bias, AI stocks may be limited in their upward trend

Danske Bank strategists pointed out that stocks rose on Wednesday, with both the S&P 500 Index and the STOXX Europe 600 Index moving higher, as artificial intelligence-related stocks rebounded for the third consecutive trading day. Earnings reports released after the market by Alphabet and Microsoft showed a divergence in AI-related revenue and capital expenditures. The bank emphasized that unchanged capital expenditure guidance may limit the rally stemming from further upward earnings revisions in the data center and semiconductor sectors. Overall, the market's response today to the earnings of major cloud computing companies was slightly negative, with South Korea’s KOSPI Index down 0.7% and Nasdaq futures falling 0.9%. However, considering the recent high volatility in AI-related stocks, such a decline is actually surprisingly modest.