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Mega-cap firm valuations fall amid rising rates, tech earnings concerns

Published 2023-11-01, 05:55 a/m
© Reuters. FILE PHOTO: A sign is pictured outside a Google office near the company's headquarters in Mountain View, California, U.S., May 8, 2019.  REUTERS/Paresh Dave/File Photo
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(Reuters) - Most global mega-cap stocks continued their slide in October, hit by the rise in U.S. interest rates and lacklustre third-quarter earnings growth among some top U.S. tech firms.

Google parent Alphabet (NASDAQ:GOOGL)'s market capitalization dropped nearly 6% to $1.56 trillion at the end of October, as its cloud business faced its slowest growth in 11 quarters, primarily due to reduced corporate spending on cloud-related services in response to the global economic slowdown.

Tesla (NASDAQ:TSLA)'s market value tumbled almost 20% to $638 billion last month, largely due to the impact of rising U.S. interest rates on electric vehicle (EV) demand. Additionally, Panasonic Holdings, a key supplier to Tesla, announced a reduction in automotive battery production in Japan for the September quarter, highlighting a global slowdown in EV sales.

U.S. chipmaker Nvidia Corp's market cap dropped 6.3% to $1.01 trillion at the end of last month on reports it may be forced to cancel up to $5 billion worth of advanced chip orders to China in compliance with new U.S. government restrictions.

On the other hand, Microsoft (NASDAQ:MSFT)'s market value jumped 7.1% to $2.5 trillion, buoyed by its strong fiscal first-quarter results in all segments. This growth was attributed to strong performances in cloud computing and PC businesses, bolstered by increased customer interest in its artificial intelligence offerings.

© Reuters. FILE PHOTO: A sign is pictured outside a Google office near the company's headquarters in Mountain View, California, U.S., May 8, 2019.  REUTERS/Paresh Dave/File Photo

Meanwhile, Saudi Arabian Oil Co's market cap slumped nearly 5% to $2.1 trillion, affecting by ongoing conflict in the Middle East and a decline in oil prices.

(This story has been refiled to fix the Alphabet instrument code in paragraph 2)

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