Nvidia and Microsoft, two key members of the “Magnificent Seven” group of high-performing tech stocks, have experienced a staggering market value loss of $2.6 trillion over a span of 20 days, according to a report by The Kobeissi Letter. This loss is three times greater than the entire stock market value of Brazil, underscoring the severity of the situation.
What Are the Magnificent Seven?
The Magnificent Seven, which have been outperforming the broader S&P 500 since the market low in 2022, consist of Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. These tech giants are now under scrutiny as their upcoming earnings reports could significantly influence high-risk asset markets, including cryptocurrencies.
Why Are Earnings Reports Crucial?
Microsoft’s stock saw a 3.8% drop on July 30, despite posting better-than-expected earnings. Currently valued at $3.1 trillion, Microsoft’s market cap has dropped by 15% in the last three weeks. Meanwhile, Apple, the largest company by market value at $3.35 trillion, has lost 9% or $312 billion in value since July 10. Their earnings report is expected on August 1.
Nvidia has also faced a significant setback, with its stock plunging 23% and resulting in an $800 billion market value loss since July 10. Despite this, its second-quarter earnings report isn’t due until August 28. Amazon, with a market value of $1.89 trillion, has declined 12% in the last three weeks and will release its earnings on August 1.
Earnings Insights and Market Impact
Meta, formerly known as Facebook, has seen an 18% drop, losing $257 billion in market value since July 10. Tesla also reported its lowest profit margins in five years, leading to a 19% loss in capital. The divergence between the declining tech stocks and the rising crypto market cap, which gained 11% over the same period, is noteworthy.
Key Takeaways
– Monitor upcoming earnings reports from tech giants as they could set the tone for market trends.
– Significant drops in stock value across major tech firms indicate potential volatility.
– The tech sector’s performance may influence high-risk asset markets, including cryptocurrencies.
While the tech giants face significant market value losses, the divergence with the crypto market’s performance could indicate evolving investor sentiment and shifting market dynamics.