The "Seven Tech Giants" in the United States face selling pressure, with an estimated total market value evaporating by $800 billion
The stock prices of the "Seven Tech Giants" in the United States are facing sell-offs, with an overall market value expected to evaporate by $800 billion. Apple and other heavyweight companies have seen their stock prices drop by over 4% due to concerns about the U.S. economic recession and Berkshire Hathaway's sale of Apple shares. Investors' doubts about building artificial intelligence infrastructure have intensified, leading to a combined market value loss of $800 billion for the seven companies. In addition, Nvidia's new artificial intelligence chip may be delayed from listing due to design flaws and production issues. Large tech stocks have been under pressure in recent weeks, fearing that the cost of optimizing data centers for artificial intelligence is too high
Reuters, August 5 - Apple (AAPL.O) and other heavyweight companies suffered a sell-off on Monday due to concerns about a US economic recession and Berkshire Hathaway (BRKa.N) selling about half of its stake in Apple, further dampening the months-long rally driven by optimism in artificial intelligence.
Apple, Tesla (TSLA.O), Google parent company Alphabet (GOOGL.O), and Amazon (AMZN.O) all fell by over 4%, Nvidia (NVDA.O) plummeted by 7%, Microsoft (MSFT.O) and Meta Platforms (META.O) dropped by 3%, intensifying investors' doubts about massive spending on building artificial intelligence infrastructure amid concerns about a potential US economic recession.
According to data from the London Stock Exchange Group (LSEG), the combined market value of these seven companies was estimated to lose around $800 billion that day.
"It can be said that people's expectations for the so-called seven giants have been too high. In the eyes of investors, they have become unattainable, and when they are no longer as great, the knives come out," said AJ Bell investment analyst Dan Coatsworth.
Chip stocks generally declined, with the Philadelphia Semiconductor Index (.SOX) falling by 2.6%, reaching a 14% decline over the past three trading days.
Last Friday, a weak US jobs report pushed global investors towards safe-haven assets and sparked bets that the Federal Reserve would have to cut interest rates quickly to avoid an economic recession. The US stock market faced widespread selling pressure for the third consecutive trading day.
Berkshire Hathaway, led by Buffett, stated over the weekend that its stake in Apple had been halved, raising concerns about the future of the tech industry.
In addition, tech publication The Information and the Financial Times reported that design flaws and production failures could delay the launch of Nvidia's new artificial intelligence chips.
After driving Wall Street stocks higher for over a year, large tech stocks have faced pressure in recent weeks as concerns mount that the costs of building artificial intelligence-optimized data centers may be higher than expected, and the returns on these expenditures may take longer to materialize.
Image: Performance of the "seven giants" in the stock market so far this year
Amazon, Microsoft, and Alphabet's stock prices have recently fallen, casting doubt on the financial reports of these three largest cloud computing service providers, with their multi-billion-dollar investments in artificial intelligence potentially impacting profit margins.
Despite the sell-off, Nvidia's stock price has nearly doubled this year. Following the recent sell-off, Microsoft and Amazon's stock prices are still up by 5% this year, while Apple has risen by 7%. Tesla has declined by 21% year-to-date.
Some analysts suggest that Monday's decline may provide investors with an opportunity to buy large tech stocks at more attractive valuations, noting that their investments in artificial intelligence are expected to yield long-term returns, and their market positions remain solid Figure: P/E ratio of the "Seven Giants"
