Nvidia Leads Chip Stocks Higher on Meta’s Planned Tech Binge
(Bloomberg) -- Buried in a gloomy earnings report from Meta Platforms Inc. was a bit of good news -- just not for the Facebook parent company.Most Read from BloombergNew Covid Boosters Aren’t Better Than Old Ones, Study FindsAdidas Cuts Ties With Ye, Absorbing €250 Million Profit HitHere Are the Most Expensive US Cities for Renters Right NowBlinken Warns of Consequences If Nuclear Weapon Used in UkraineThe shares of companies that supply data centers gained after Meta Platforms said it’s plannin
Nvidia Leads Chip Stocks Higher on Meta’s Planned Tech Binge
(Bloomberg) -- Buried in a gloomy earnings report from Meta Platforms Inc. was a bit of good news -- just not for the Facebook parent company.
Most Read from Bloomberg
Musk Posts Then Deletes Tweet Spreading Conspiracy Theory on Pelosi Attack
Democrats Prepare for Loss of Congress as Voters Break Late to GOP
Stocks Trim Big October Rally as Bond Yields Climb: Markets Wrap
Lula Edges Out Bolsonaro to Win Presidency of Divided Brazil
Three Top Bankers Pull Out of Hong Kong's Global Finance Summit
The shares of companies that supply data centers gained after Meta Platforms said it’s planning to spend even more on components next year as it invests in infrastructure to support its push into digitally immersive experiences.
In its third quarter earnings report, Meta Platforms projected capital spending of $34 billion to $39 billion in 2023, up from $30 billion to $34 billion this year. The comments sent Nvidia Corp. and Marvell Technology Inc. up more than 3% in postmarket trading.
Arista Networks Inc., which makes networking gear used in data centers and counts Meta as one of its biggest customers, is up more than 7%.
“Amidst increased question/concern that Meta would significantly reduce their forward capex guide in conjunction with third quarter results, tonight we got the absolute opposite,” Wells Fargo analysts led by Aaron Rakers said in a report.
While Meta’s spending plans are a boon to its suppliers, it was received poorly by investors skeptical of the high costs associated with its strategic shift. The stock dropped 14% after the company projected weaker-than-expected sales in the current quarter.
Most Read from Bloomberg Businessweek
When Netflix and HBO Turned on Each Other, They Forged a New Era of Television
What the Alzheimer’s Drug Breakthrough Means for Other Diseases
Student Debt Headaches Return for Millions Despite Biden Relief
Basketball’s Top Shrink on How Finding Purpose Lifts Performance
One Way to Boost Profits and Reduce Inequality? Turn Workers Into Owners
©2022 Bloomberg L.P.