Asia Morning Briefing: MSFT, Meta Soar on Strong AI Earnings, but Crypto AI Tokens Fail to Follow
Asia Morning Briefing: Markets React to Tech Earnings and Fed Uncertainty
Major technology companies Microsoft and Meta reported blockbuster earnings, driven by their respective AI initiatives. Microsoft’s cloud revenue surged 27% to $46.7 billion, with Azure exceeding $75 billion annually. Meta saw a 22% year-over-year revenue increase to $47.5 billion, boosted by AI-powered ad models. Despite these positive results, AI tokens, tracked by CoinGecko’s AI token category (including TAO, NEAR, ICP, and RENDER), experienced a modest 1.4% decline. This contrasts with the generally flat performance of the CoinDesk 20, a benchmark of the world’s largest digital assets, which remains below 4,000.
The muted response of AI tokens to the strong tech earnings is attributed to recent comments from Federal Reserve Chair Jerome Powell. Powell’s suggestion that tariff-driven inflation may be just beginning introduced uncertainty into the market, impacting risk assets broadly. Market maker Enflux noted this uncertainty is causing a holding pattern until clarity emerges on inflation and the Fed’s policy response. Nvidia, a key player in the AI hardware space, is expected to report earnings later in August, and its performance may influence AI token growth.
Crypto markets exhibited volatility following Powell’s remarks, leading to over $200 million in liquidations and briefly pushing bitcoin below $116,000. Ether (ETH), however, is holding above $3,800, supported by corporate treasury investments. Gold prices fell 1.17% to $3,288.02 due to strong U.S. economic data reducing safe-haven demand. Asia-Pacific markets displayed mixed trading, influenced by new U.S. tariffs on South Korean imports and the anticipated Bank of Japan’s decision to maintain steady rates. The S&P 500 saw a slight dip of 0.12% to 6,362.90, also reflecting concerns about inflation.
Elsewhere in the crypto space, CoinDesk reported on positive sentiments for U.S. DeFi and the expectation of a Bitcoin Reserve. The Block highlighted a recent hour-long outage on Polygon and celebrated Ethereum’s resilience over the past decade. The contrasting performance of AI tokens against the backdrop of strong tech earnings underscores the impact of broader macroeconomic factors and the uncertainty surrounding future Fed policy.
