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Less than two months prior, leading figures in the technology sector gathered in Washington, D.C. for the presidential inauguration, aiming to foster a cooperative relationship with President Donald Trump in light of a tumultuous prior administration.
So far, the tech leaders have managed to avoid harsh criticisms on social media from the president. However, the sentiment from investors has not been as welcoming.
In the past three weeks, following a peak in the Nasdaq index, the seven most valuable technology companies in the U.S. — often referred to as “the Magnificent Seven” — have seen a collectively staggering loss of $2.7 trillion in market capitalization. This sell-off has led the Nasdaq to reach its lowest point since September of last year.
As of Thursday, the index has declined 4.9% for the week, putting it on track for its worst weekly performance in half a year. Should it drop more than 5.8%, it would mark the steepest weekly loss since January 2022.
The decline was triggered by President Trump’s announcement of imposing high tariffs on key trading partners, including China, Mexico, and Canada, coupled with substantial cuts to government workforce. These developments have raised concerns about a potential trade war and increasing unemployment, creating significant apprehension regarding consumer and business spending and heightening fears of an impending recession.
Moreover, several technology companies depend on overseas imports for crucial components and rely heavily on international trade partners for manufacturing.
This downturn contrasts sharply with Wall Street’s earlier expectations.
After Trump’s election victory in November, the stock market surged in anticipation of reduced regulations and favorable tax reforms. The Nasdaq climbed to an all-time high on December 16, achieving a remarkable 9% rise over approximately six weeks post-election.
Since then, electric vehicle manufacturer Tesla’s market value has plummeted by nearly 50%, despite, or possibly because of, CEO Elon Musk’s prominent involvement with the Trump administration.
The Nasdaq reached its peak for the year on February 19 — roughly one month into Trump’s second term — but subsequently experienced a downward trajectory that has persisted.
Examining the performance of the seven major corporations during this timeframe reveals notable declines:
Apple, recognized as the world’s most valuable company and the last member of the $3 trillion valuation club, has seen its market cap shrink by $529 billion, a 17% decrease since its high on February 19.
Microsoft, previously valued at over $3 trillion, has faced a $267 billion loss, reflecting nearly a 9% drop.
Nvidia, a chip manufacturer that has heavily benefited from the artificial intelligence surge, witnessed a decline of $577 billion in its market value — the largest dollar loss among the group — and is down 17% since the Nasdaq’s peak.
Amazon’s value has decreased by $347 billion, equating to a 14% drop, while Alphabet experienced a $275 billion decline, or 12%. Meta has lost $286 billion, marking a 16% decrease.
Tesla has suffered the most significant percentage drop at 33%, translating to a loss of $386 billion in value.
On Wednesday, Goldman Sachs labeled this group as the “Maleficent 7.” Chief U.S. equity strategist David Kostin pointed out that this basket of companies now trades at the most diminished valuation premium relative to the S&P 500 since 2017. Goldman has reduced its price target for the benchmark index from 6,500 to 6,200, while the S&P 500 closed Thursday at 5,521.52.
Kostin emphasized, “We believe investors will require either a catalyst that improves the economic growth outlook or clear asymmetry to the upside before they try to ‘catch the falling knife’ and reverse the recent market momentum.”
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