Four big tech companies – Apple, Microsoft, Tesla and Meta – have lost a total of $625 billion in market value this month.
This could be largely due to seasonal trends, as August tends to be a weak month for stocks, historically.
The technology sell-off came on the back of a broader decline in US stocks, driven in part by rising bond yields.
It’s been a tough month for big tech stocks.
Some of the world’s largest companies lost hundreds of billions of dollars in market value in August as US stocks headed for their worst month of 2023.
Insider’s calculations showed that Apple, Microsoft, Tesla and Meta have seen a total decline of $625 billion in market capitalization so far this month. Apple led the declines in market capitalization with a drop of $314 billion, followed by Tesla with a drop of $117 billion, Microsoft with a drop of $114 billion and Meta, $80 billion.
The recession contrasts with what was otherwise a strong year for stocks, especially big tech names, thanks to investor enthusiasm about artificial intelligence. The S&P 500 index of US stocks is up 14% year-to-date, even after falling nearly 5% in August.
Apple shares are down 10% this month, while Microsoft shares are down 4.6%. Tesla and Meta shares fell nearly 13%.
This decline may be largely due to seasonal trends. History shows that August was the second-worst month of the year for stocks in more than three decades — and it’s especially weak in the year leading up to the presidential election. Insider’s Phil Rosen reported.
Higher interest rates and higher bond yields also affected equities, reducing the relative attractiveness of the asset class. Higher borrowing costs tend to erode corporate profitability, making their stocks less attractive, while increasing bond yields provide investors with the option of earning higher returns with lower risks.
Debt yields have risen over the past few quarters as the Federal Reserve has raised interest rates sharply to quell inflation.
Other factors have also affected stocks of major technology companies in recent months. As for Apple, a modest earnings report showed that iPhone and iPad sales were declining on the back of slowing consumer spending in America.
And in the case of Tesla, investors have been increasingly concerned about the possibility of a series of price cuts that the automaker unveiled this year. damage its marginss.
While Microsoft, Tesla, Apple, and Meta have all seen their market capitalization decline, one tech company has notably defied the trend – nvidia.
The semiconductor company, known for its GPU chips, had a stellar year thanks to a strong second-quarter earnings report that showed a 101% jump in revenue from the previous year.
Read the original article at Business interested