Magnificent Seven projected to lose $1 trillion in value, with Apple and Nvidia leading the decline

TradingKeyAug 5, 2024 12:49 PM

- Apple and Nvidia spearheaded a downturn in tech stocks on Monday amid U.S. recession concerns and Berkshire Hathaway's move to reduce its stake in Apple, halting a prolonged sector rally.

- High-flying shares of Alphabet, Amazon, Meta Platforms, Microsoft, and Tesla plummeted by up to 12.2% in premarket trading, potentially erasing nearly $1 trillion in combined market value.

- The sell-off extended to chip stocks like Advanced Micro Devices, Intel, Super Micro Computer, and Broadcom, following a weak U.S. payrolls report that fueled expectations of imminent interest rate cuts by the Federal Reserve to spur economic growth.

Apple, Nvidia, and other tech giants faced significant losses, with concerns over delayed AI chip launches impacting Nvidia's shares and dampening investor expectations for rapid returns on AI investments by major tech firms like Amazon, Microsoft, and Alphabet. The market correction highlights a shift in sentiment towards the once-favored tech sector, signaling a potential reevaluation of the industry's growth prospects in the face of mounting challenges and delays.

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