Nvidia Leads Chip Stocks Higher on Predicted Meta Tech Frenzy
(Bloomberg) — Buried in a dismal earnings report from Meta Platforms Inc. was good news — but not for Facebook’s parent company.
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Shares of companies that provide data centers rose after Meta Platforms said it plans to spend even more on components next year as it invests in infrastructure to support its push towards immersive experiences digital.
In its third-quarter earnings report, Meta Platforms forecast 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 post-market trading.
Arista Networks Inc., which makes networking equipment used in data centers and counts Meta as one of its largest customers, rose more than 7%.
“Amid growing question/concern that Meta would significantly reduce its forward investment guidance in conjunction with third quarter results, tonight we got the absolute opposite,” Wells Fargo analysts led by Aaron said. Rakers in a report.
Although Meta’s spending plans are a boon for its suppliers, they have been poorly received by investors skeptical of the high costs associated with its strategic shift. The stock fell 14% after the company forecast weaker-than-expected sales in the current quarter.
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