Nvidia Corporation (NASDAQ:NVDA) shares fell by 6% as the “Magnificent Seven” stocks were on track to lose approximately $520 billion in market capitalization during Monday’s market plunge. As of 11:35 a.m. ET, these seven stocks were experiencing their 10th largest market valuation decline ever. Collectively, the Magnificent Seven account for around 43% of the Nasdaq 100 (^NDX) weighting.
Declines Across the Board
The other members of the Magnificent Seven also saw declines, with Alphabet Inc. (NASDAQ:GOOGL, NASDAQ:GOOG) and Meta Platforms Inc. (NASDAQ:META) both falling more than 2%. Tesla Inc. (NASDAQ:TSLA) plunged over 3%, and Amazon.com Inc. (NASDAQ:AMZN) dropped more than 3%. Microsoft Corporation (NASDAQ:MSFT) also experienced a slip of more than 2%.
Individual Company News Impacts Stocks
Apple Inc. (NASDAQ:AAPL) saw a nearly 4% drop after Berkshire Hathaway Inc. (NYSE:BRK-B) disclosed that it had reduced its stake in the iPhone maker by 50% over the weekend.
Nvidia, a major player in the AI chip sector, saw its shares tumble by as much as 13% at the market opening before partially recovering. Analysts pointed to recent negative developments impacting Nvidia’s stock. According to The Information, the company’s next-generation AI chips are facing a three-month delay, potentially affecting major clients such as Microsoft, Alphabet, and Meta.
Gil Luria, a senior software analyst at D.A. Davidson, commented, “Nvidia has a window to sell to Microsoft, Amazon, Google, and Meta while these companies are eager to expand their data centers quickly. This window will close eventually. Missing out on some of these sales impacts Nvidia’s value.”
Sector-wide Sell-Off
Monday’s sell-off is part of a broader trend, with chip stocks experiencing significant losses over the past week. Nvidia had closed Friday down 1.8% from session lows, while Intel Corporation (NASDAQ:INTC) shares plummeted over 26% following a disappointing second-quarter earnings report. The tech sector has been broadly affected, with the Nasdaq Composite (^IXIC) slipping into correction territory after the July jobs report revealed slower job growth and an increase in the unemployment rate to a nearly three-year high.
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