Cold Feet Over AI Spending Brings Nasdaq Down
Thursday, January 29th, 2026
Market trading closed off session lows today across major indexes — kicking off the trading today flattish but sinking like a stone — particularly the tech-heavy Nasdaq, which fell -2.5% before lunchtime and recovering somewhat. The Dow closed +55 points, +0.11%, while the S&P 500 was -0.13%. The Nasdaq surrendered -172 points, -0.72%, and the small-cap Russell 2000 gained 1 point.
Microsoft MSFT selling off was the big story today, as investors attempted to digest the AI spending and OpenAI exposure that was multitudes higher than anticipated. Even though the company ultimately posted beats on top and bottom lines for its fiscal Q2, the outlook appears riskier on the AI-spending front. What results was the second-largest erasure of market-cap in one day’s worth of trading: -$430 billion in one day.
Compare this to a company like Meta Platforms META, which was up +10.4% today and also indicated it would continue spending big on AI. Because Meta is already to realize some gains from its AI investment, as it goes toward advertising and marketing efforts in the hot social media space, whereas Microsoft’s mainstay is software, which is taking a hit in the current tech environment.
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Earnings Reports After the Close: AAPL, V, SNDK
Apple AAPL outperformed expectations in its fiscal Q3 report this afternoon, with earnings of $2.84 per share easily surpassing the $2.65 Zacks consensus (and the $2.40 per share reported in the year-ago quarter). Revenues of $143.76 billion outpaced the $137.81 billion analysts were expecting, and increased +16% year over year.
The company won’t provide guidance until the conference call coming up, but the quarter had plenty of goodies without it: iPhone sales rose +23% year over year to $85.27 billion, higher than expected on a surprise +38% surge in China sales for the quarter. Services were slightly below projections but still +14% to $30.01 billion. Shares are up +1% on the news, but still down -4% from the start of the year.
Visa V, which literally never misses earnings estimates (but has only outperformed by +2.7% on average over the previous four quarters) posted $3.17 per share, a three-cent beat. Revenues of $10.9 billion also exceeded expectations of $10.7 billion, +15% from a year ago. The shadow over Visa’s future growth is President Trump’s idea to cap credit card rates going forward. Shares are down -1.8% in late trading.
Most impressive is SanDisk’s SNDK huge earnings beat: $6.20 per share versus $3.54 anticipated, at least partially justifying the stock’s +120% jump in the past month of trading. Revenues of $3.03 billion improved over the $2.67 billion, with next-quarter earnings guidance catapulting to $12-14 per share, way up from the $5.36 in the Zacks consensus. SanDisk, which spun off from Western Digital WDC, saw +64% growth in its Data Center business quarter over quarter.
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Beyond Nvidia: AI’s Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren’t likely to keep delivering the biggest profits. Little-known AI firms tackling the world’s biggest problems may be more lucrative in the coming months and years.
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Visa Inc. (V) : Free Stock Analysis Report
Western Digital Corporation (WDC) : Free Stock Analysis Report
Sandisk Corporation (SNDK) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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