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Tech Titans Tumble: Disappointing Earnings Rattle Markets as Carvana Soars

Markets declined Wednesday as major technology companies released disappointing reports, with the S&P 500 falling 1.6%, the Nasdaq Composite dropping 2.5%, and the Dow Jones Industrial Average decreasing 0.64%.

Technology giant Microsoft saw its shares decline 5.5% following weak revenue guidance, while Meta Platforms dropped 4% despite beating earnings estimates, as investors reacted to missed user growth targets and higher projected capital expenditure for 2025.

Several S&P 500 companies made significant moves during midday trading. Top gainers included Paycom Software, rising 24.7%, Entergy advancing 14.6%, and International Paper climbing 13.2%. Conversely, major declines were seen in Huntington Ingalls, falling 23.2%, Estee Lauder dropping 20.7%, and Monolithic Power Systems declining 18.5%.

Used-car retailer Carvana experienced a substantial surge, with shares jumping 24% following an impressive third-quarter performance. The company reported earnings of 64 cents per share, substantially exceeding analyst expectations of 25 cents. Revenue reached $3.65 billion, surpassing projected figures of $3.45 billion. Carvana also raised its 2024 earnings forecast, indicating that adjusted EBITDA would significantly exceed its previous guidance range of $1 billion to $1.2 billion. The company anticipates increased retail vehicle sales in the fourth quarter, building on its third-quarter sales of 108,651 vehicles.

Despite reporting better-than-expected earnings, Meta Platforms saw its shares decline 4.5%. The social media company posted earnings of $6.03 per share, exceeding analyst projections of $5.25, while revenue grew 19% year-over-year to $40.59 billion. Daily active users increased to 3.29 billion, though slightly below the anticipated 3.31 billion. CEO Mark Zuckerberg emphasized continued significant investment in AI infrastructure during the earnings call. The company projects fourth-quarter revenue between $45 billion and $48 billion.

Cryptocurrency exchange Coinbase faced an 11% decline following disappointing third-quarter results. The company reported earnings of 28 cents per share, falling short of the expected 41 cents, with revenue of $1.21 billion missing analyst estimates of $1.26 billion. Despite these misses, CEO Brian Armstrong highlighted positive aspects, including the company’s seventh consecutive quarter of positive adjusted EBITDA and fourth straight quarter of positive net income.

Coinbase’s retail trading revenue showed significant growth, increasing 98% year-over-year to $483.3 million, while institutional revenue nearly quadrupled to $55.3 million. Transaction revenue reached $572.5 million, representing a 98% increase. Subscription and services revenue, driven by stablecoins, staking, and Prime trader products, grew 66% to $556.1 million. However, the company warned of potential flat growth in the current quarter, citing October’s 10% decline in ether prices and other market challenges.

Other notable technology stocks experiencing pressure included Nvidia, which fell 4.7% during the session. The overall market sentiment reflected concerns about technology sector performance and future growth prospects, particularly in relation to artificial intelligence investments and market conditions affecting digital assets and cryptocurrencies.