The mega-cap technology companies known collectively as the “Magnificent Seven” lost a combined $1 trillion U.S. of value amid the global market rout that occurred on Aug. 5.
Chipmaker Nvidia (NVDA) lost $300 billion U.S. in market capitalization when markets opened. The stock ended the day down 6.4% for a loss of $168 billion U.S.
Apple (AAPL) and Amazon’s (AMZN) valuations fell $224 billion U.S. and $109 billion U.S. respectively at the market’s open.
Apple ended down 4.8% on the day, shedding $162 billion U.S. in market cap. Amazon fell a total of 4.1% to lose $72 billion U.S. in value.
The other Magnificent Seven stocks also suffered steep declines, with Meta Platforms (META),
Microsoft (MSFT), Alphabet (GOOG/GOOGL) and Tesla (TSLA) each seeing their stocks drop more than 3%.
The decline in the biggest technology stocks resulted from a global market selloff that saw the Dow Jones Industrial Average shed 1,000 points in a day and the tech-heavy Nasdaq exchange lose nearly 5%.
Overseas, Japan’s Nikkei 225 index plummeted 12% for its worst day since the 1987 “Black Monday” crash on Wall Street. Bitcoin’s price fell 11% as the entire cryptocurrency sector fell.
The sharp selloff has been prompted by fears that the U.S. economy is entering a recession and the U.S. Federal Reserve has been too slow to lower interest rates.
The worries have been compounded by mixed second-quarter financial results from Amazon, Alphabet and Microsoft over the past week.
The market downturn also comes amid a rotation of investor capital out of mega-cap technology stocks and into small-cap and value securities that began in July.
In this year’s first half, mega-cap technology stocks led the market rally as investors bet on the hype surrounding artificial intelligence (AI).
The market capitalizations of Nvidia, Microsoft and Apple each surpassed $3 trillion U.S. in the spring as the mega-cap stock rally gathered momentum.
However, in recent weeks some analysts have begun to question the heavy spending on AI technologies and the long-term potential of AI.
