A massive $1 trillion loss: Major tech companies face severe market downturn
Editor Thenews24.net
2 min read
As trading commenced on Monday, the U.S. stock market saw a significant drop in the market capitalization of major tech companies, amounting to nearly $1 trillion. This decline exacerbated the downturn that had already pushed the Nasdaq into correction territory the previous week.
Nvidia experienced a dramatic loss of over $300 billion in market cap at the opening bell but managed to recover about half of that loss quickly. By the end of the day, Nvidia’s shares had fallen by 6.4%, equating to a $168 billion loss. Apple and Amazon also saw substantial declines, with their valuations dropping by $224 billion and $109 billion, respectively, at market open. Apple closed down 4.8%, losing $162 billion in market cap, while Amazon ended the day down 4.1%, a $72 billion loss.
The combined losses of Meta, Microsoft, Alphabet, and Tesla, along with Nvidia, Apple, and Amazon, resulted in a total market cap reduction of $995 billion in the early hours of trading. However, some recovery was observed as the day progressed.
The broader market also suffered on Monday due to recession fears triggered by disappointing economic data from the previous week. Japan’s Nikkei 225 plummeted 12%, marking its worst day since the 1987 “Black Monday” crash. Bitcoin also dropped 11%, leading to a sell-off in cryptocurrencies and related stocks.
Investor anxiety within the tech sector has been building for weeks. The Nasdaq fell 3.4% last week, marking its worst three-week performance in two years, and continued to drop another 3.4% on Monday. Reports from Amazon, Alphabet, and Microsoft have contributed to the market’s unease, a stark contrast to a few months ago when investors were optimistic about heavy investments in artificial intelligence by companies like Meta and Google.
Nvidia, which has benefited significantly from the AI boom due to its GPUs, saw its market cap surpass $3 trillion, briefly making it the world’s most valuable company ahead of Microsoft and Apple. However, its market cap has since fallen below $2.5 trillion.
Some analysts have recently warned of potential overinvestment in AI. A notable Goldman Sachs report from June highlighted that the companies with the highest AI expenditures had little to show for their investments. Additionally, Elliott Management, a major hedge fund, reportedly described Nvidia as being in a “bubble” and suggested that the AI hype was exaggerated.
Nvidia is set to report its earnings later this month, having achieved revenue growth exceeding 200% for the past three quarters.