Nvidia Leads Market Plunge as Magnificent Seven Stocks Lose $520 Billion in Market Cap

Many are saying Nvidia is at bargain basement prices right now.

Nvidia (NVDA) shares fell 6% as the “Magnificent Seven” stocks were on track to wipe out roughly $520 billion in market cap during Monday’s market plunge. As of 11:35 a.m. ET, the Mag Seven were tracking their 10th biggest market valuation decline ever. Together, the seven stocks make up roughly 43% of the Nasdaq 100 (^NDX) weighting. The other components of the group also dropped, with Alphabet (GOOGL, GOOG) and Meta (META) falling more than 2%. EV giant Tesla (TSLA) plunged more than 3%. Ecommerce giant Amazon (AMZN) dropped more than 3%, while software maker Microsoft (MSFT) slipped more than 2%.

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Magnificent Seven” stocks shed $2.6T before earnings week! 🚨

High-performing tech stocks like Nvidia and Microsoft lose $125B/day, while #crypto market cap rises 11%. 📉📈#CryptoNews pic.twitter.com/ZEmm1CPo6U

— 24h.bz (@24hbz) July 31, 2024

Individual company news also put pressure on the Mag Seven stocks. Apple (AAPL) dropped nearly 4% after Berkshire Hathaway (BRK-B) revealed over the weekend it had cut half of its stake in the iPhone maker. AI chip heavyweight Nvidia fell as much as 13% at the market open to pare some of its losses. Analysts noted recent negative catalysts weighing on the stock. The Information reported the company’s upcoming next-generation AI chips would be delayed by three months, potentially impacting its biggest customers like Microsoft, Alphabet, and Meta.

“Nvidia has a window to sell to Microsoft, Amazon, Google, and Meta while those companies are hot and bothered about building out data centers as quickly as they can. That window will shut at some point,” Gil Luria, D.A. Davidson senior software analyst, told Yahoo Finance on Monday. “If Nvidia is missing out on some of those sales during that window, that does have an impact on Nvidia’s value,” said the analyst. Monday’s action follows a recent heavy sell-off on Wall Street as chip stocks have gotten hammered over the past week.

Nvidia shares tank as Magnificent 7 stocks on track to lose $500 billion in market cap https://t.co/nZxd7woGWg

— The Stock Market News (@_stockmarkets) August 5, 2024

Nvidia stock tumbled more than 5% Monday amid a broader market selloff. On Friday Nvidia closed off the lows of the session, down only 1.8%, while Intel (INTC) shares cratered over 26% following a disastrous second-quarter earnings report and a broad decline in chip stocks led the tech sector lower. After the July jobs report, which showed job growth slowed last month and the unemployment rate reached a nearly three-year high, the Nasdaq Composite (^IXIC) slipped into correction territory, defined as a 10% drop from its most recent high.

Key Points:

i. Nvidia Shares Drop: Nvidia (NVDA) shares fell 6%, contributing significantly to the $520 billion market cap decline of the “Magnificent Seven” stocks.

ii. Tech Giants Slide: Other key components, including Alphabet, Meta, Tesla, Amazon, and Microsoft, also experienced notable declines ranging from over 2% to more than 3%.

iii. Apple’s Dip: Apple dropped nearly 4% following news that Berkshire Hathaway had cut half of its stake in the company.

iv. Chip Stocks Hit: Nvidia faced additional pressure due to reports of delayed next-generation AI chips, affecting its major customers like Microsoft, Alphabet, and Meta.

v. Broader Market Impact: The Nasdaq Composite slipped into correction territory after the July jobs report indicated slowed job growth and a rise in unemployment.

Fallon Jacobson – Reprinted with permission of Whatfinger News