‘Magnificent Seven’ Tech Stocks Drop a Massive $280 Billion on Crypto Rise
More than $280 billion has been wiped from the “Magnificent Seven” tech stocks since they released multiple earnings reports on Oct. 25, sparking a tech crash.
The so-called “Fabulous Seven” refers to the top seven blue-chip technology companies, including Apple, Microsoft, Meta, Amazon, Alphabet, Nvidia and Tesla, which make up about a quarter of the S&P 500 index.
Shares of Google's parent company, Alphabet, fell more than 9 percent, wiping $180 billion off the market cap, and it turned out to be Google's worst day since the Covid-19 pandemic hit in March 2020.
According to Y Charts, the stock prices of Amazon, Nvidia and Meta fell by 5.5%, 4.3% and 4.2% respectively.
Apple and Tesla's share price falls were less severe at 1.35% and 1.9%, respectively, while Microsoft was the only trendsetter of the seven, with its share price up 3.1% after reporting better-than-expected growth in its Azure business. .
“This is the most widespread tech sell-off in months, leading to a 5-month low for the S&P 500,” Kobeisi said.
That's what happens to the few stocks that catch the overall market break, the company said, adding that tech stock investors could start to experience price declines.
“Buyers seem to be more hesitant as headwinds accumulate,” Kobeisi explained in a follow-up response.
Fears of a “stock market crash” are also reflected in Google search trends, with the three-word term up 233% in the past week.
Google's stock market crash has increased 233 percent in the past week.
If the stock market crashes 10%, what stocks are you investing in? pic.twitter.com/TQz8tVyL5U
– Andrew Lokenauth | TheFinanceNewsletter.com (@FluentInFinance) October 24, 2023
On the other hand, BTN ETF approvals in the United States are boosting the crypto market, with market capitalization up 16.3 percent to $1.3 trillion in the past week, CoinGecko reports.
Bitcoin (BTC), Ether (ETH), Binance Coin (BNB) and XRP are up 23.3%, 16.7%, 8% and 15.2% respectively in the last seven days.
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However, the crypto market has not proven to be bulletproof in the face of tough macroeconomic conditions.
As US real gross domestic product declined in the first two quarters of 2022, the cryptocurrency market cap fell 61.7% from $2.37 trillion to $907 billion, according to CoinGecko.
Analysts speculate that bitcoin will diverge more than tech stocks and the S&P 500, with past research from the multidisciplinary Digital Publishing Institute suggesting that bitcoin still tends to trade like a “tech stock” over the long term — given its high volatility.
However, it can serve as a viable hedge against the US dollar, which is negatively correlated, according to the research firm's October 2022 report.
Since September 1, Bitcoin has diverged from the NASDAQ 100, rising 34%, while the NASDAQ fell 8.6% over the same period.
Meanwhile, some observers have hinted that the recent investor activity could be seen as a “flight to safety” towards bitcoin – especially given the recent slump in many banking stocks.
It's like predicting that #crypto will emerge from stocks. And here we are with tech #stocks sinking and #Bitcoin rallying. https://t.co/K1R3OIiOgV
— Bryan Ross (@bryanrosswins) October 25, 2023
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