Tech Titans Tumble: 'Magnificent Seven' Shed $250 Billion In Market Cap On 2024 Day One
The Magnificent Seven, a nickname given to a group of fast-growing technology companies, was founded in 2015. 2024 is off to an impressive start, with their combined market value falling $250 billion in the first trading session of the year.
The largest decline occurred in Apple Inc. shares. AAPL – by more than 4 percent. During this period, the Cupertino, California-based company had a market capitalization of $116 billion.
The drop, the worst since early August 2023, was prompted by a sell call from Barclays analyst Tim Long, who downgraded the iPhone maker to underperform from equal and cut its price target from $161 to $160.
Six other tech giants : Microsoft Corp. MSFT , Alphabet Inc. GOOGLE , Amazon Inc. AMZN , Meta Platforms Inc. META , NVIDIA Corporation. NVDA and Tesla, Inc. TSLA – and its market value is falling.
The Magnificent Seven Primates at the 2024 Opening Day
In 2023, the Magnificent Seven experienced a spectacular comeback, with the stock market index rising 110% to a new all-time high.
However, traders appear to have taken a more conservative stance at the start of 2024, especially after the strong rally in the last two months of 2023.
This failure didn't just happen to the Magnificent Seven. The Invesco QQQ Trust QQQ Index, which tracks the Nasdaq 100 Index, fell 2.2%, and the entire technology sector also felt the impact.
Fed rate cuts and geopolitical issues
Markets, previously buoyed by optimism about the prospect of a Fed rate cut (a 90% chance of a cut in early March and five more cuts by the end of December), are now taking time to assess ongoing economic and geopolitical risks.
Global trade tensions have increased in recent weeks, especially in the Red Sea region. Attacks on merchant ships by Iran-backed Houthi rebels have forced them to divert major shipping routes bypassing the Gulf of Aden and the Suez Canal, increasing shipping times and costs.
The world's most powerful technology company, European chipmaker ASML Holdings NV, agreed to a White House request to stop supplying certain equipment to China weeks before it imposed a ban on exports of equipment used to make high-performance chips.
The move put pressure on the semiconductor industry, with 2024 off to a rocky start with the SOXX iShares Semiconductor ETF down 4%.
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