Nvidia (NVDA) took a hit on Monday, with the stock dropping over 6% as part of the broader market plunge that resulted in a $650 billion valuation wipeout for the “Magnificent Seven” stocks. These seven stocks collectively represent more than 40% of the Nasdaq 100 (^NDX) weighting, making their performance crucial to the overall market sentiment.
In addition to Nvidia, other members of the Mag Seven index also experienced declines. Alphabet (GOOGL, GOOG) slid 4%, Meta (META) fell over 2%, and EV giant Tesla (TSLA) dropped more than 4%. Ecommerce behemoth Amazon (AMZN) and software maker Microsoft (MSFT) were not spared from the sell-off either.
Individual news events added to the pressure on these stocks. A judge ruling on Monday found that Alphabet’s Google search and ad businesses violated antitrust laws, leading to a drop in Alphabet’s shares. Meanwhile, Apple (AAPL) saw a more than 4% decline amidst the market sell-off and news that Berkshire Hathaway (BRK-B) had trimmed its stake in the tech company.
Nvidia’s sharp decline at the market open, with the stock falling as much as 13%, raised concerns among analysts about negative catalysts impacting the AI chip heavyweight. Reports indicated that the company’s next-generation AI chips could face a three-month delay, potentially affecting key customers like Microsoft, Alphabet, and Meta.
According to Gil Luria, a senior software analyst at D.A. Davidson, Nvidia’s ability to leverage the current demand for data center builds from tech giants could be hindered if the chipmaker misses out on sales opportunities during this crucial period.
This latest decline in chip stocks adds to the recent turbulence in the tech sector, with Intel (INTC) shedding over 26% following a disappointing earnings report, and the Nasdaq Composite (^IXIC) slipping into correction territory post the July jobs report.
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