The NASDAQ is slumping. Tech stocks are rolling over, but why growth is strong AI provides a narrative and the economy is not in bad shape.

Today the fundamental story within tech.

It's Thursday October 26th. Welcome to Tech Check. I'm dear

D. I'm Mark Gilbert. D. We're mostly through third quarter earnings at

least for big tech. How do you feel? I feel like leading up to the earning season we always

talk about the outsized impact that the mega cap tech stocks could have on the

broader markets right that old saying as goes Apple, goes the market. So there's always sort of that opportunity for things to go really haywire, but it feels like over the last few quarters, it's just been pretty pretty sturdy and that's what I've found this

quarter as well. The numbers have actually been strong but the stocks have gotten punished and to me it just doesn't feel like a mega cap story it

feels broader than that it feels like it's about economic worries and yields

right and for context Microsoft Meta alphabet they all reported this week and all three stocks now are lower since Monday despite what

was actually some pretty strong numbers at least you know in terms of growth for all of them.

There's you know there's a habit to look at them and say, okay, you look at an alphabet, the weak spot was cloud, and that's why shares are something, but I don't actually think that's the case because

Cloud still makes up such a small proportion of overall revenue this is still

such an advertising and search advertising YouTube advertising story and on that front at its core I mean it's firing on all cylinders right the

advertising the advertising results for Google were strong and YouTube

exactly and then Meta kind of gave us the same story, even though there were some concerns about the current

quarter and the war that broke out.

But it also told us beyond that that it actually can balance massive costs with profitability.

That was like such a key question at the beginning of this year and we didn't even

have the generative AI cycle at that point.

This was can they balance out all the costs that they spent over the pandemic coming out of it

and, you know, reach a better measure of profitability.

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