Alphabet capex plans spook investors, while AMD has a brutal day in markets

Alphabet has reported impressive fourth-quarter earnings, exceeding Wall Street's forecasts with a remarkable 48% revenue increase in its cloud division from the previous year. However, the tech giant's announcement of a capital expenditure plan for 2026, projected between $175 billion and $185 billion, has raised eyebrows. This ambitious budget, which could more than double last year's spending, led to a noticeable decline in Alphabet's stock, dropping as much as 3% in after-hours trading. The tech sector is facing additional challenges, particularly with shares of Advanced Micro Devices (AMD) plummeting by 17.3% during the trading day following a disappointing first-quarter forecast. Other companies involved in artificial intelligence, including Broadcom and Oracle, also experienced declines. As a result, the tech-heavy Nasdaq Composite fell by 1.51%, while the S&P 500 dropped 0.51%, marking its fifth negative session in six. In contrast, the Dow Jones Industrial Average increased by 0.53%, buoyed by gains from Amgen and Honeywell. Despite the current struggles within the AI sector, Jim Cramer of CNBC Investing Club remains optimistic about South Korean chip manufacturers, Samsung Electronics and SK Hynix, whom he described as 'visionary' companies during a segment on 'Squawk Box Asia'. In broader market movements, oil prices saw a slight decline of around 1% due to anticipated talks between the U.S. and Iran scheduled for Friday. Meanwhile, Venezuela has reassured China that its oil pricing will not be influenced by U.S. actions, and Russia has clarified that India is not halting oil purchases from Moscow, contrary to claims made by former President Trump. In other news, the Panama Supreme Court has ruled against Hong Kong-based CK Hutchison's port operations concerning the Panama Canal, viewed as a significant win for Trump. U.S. lawmakers are also considering implementing critical mineral price floors with Mexico, the EU, and Japan to reduce reliance on China, highlighting the ongoing strategic importance of critical minerals in U.S. trade policy. Overall, major U.S. stock indexes faced downward pressure on Wednesday, with the S&P 500 continuing its streak of losses, while the pan-European Stoxx 600 remained relatively unchanged. Notably, shares of Novo Nordisk in Denmark experienced a sharp decline of 17.2%. Investors are now left questioning the future profitability of AMD amidst increasing scrutiny over its operating expenses and overall financial health.