The so-called Magnificent Seven stocks—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla—are heading towards a painful trading day on Monday. These seven stocks are set to lose around $1 trillion in value after a major sell-off in pre-market trading.
iPhone maker Apple and chipmaker Nvidia have taken the biggest hit.
Apple’s shares have dropped by more than 10% and will go below $200 per share for the first time since May. Apple was also particularly hit hard by Berkshire Hathaway’s decision to cut its long-standing stake in the company by 50% last week.
Nvidia had it even worse, shedding 13%, and is set to open at $92.45 per share. The chipmaker’s decision to delay the production of its new AI chips for three months due to design flaws didn’t sit well with investors. After reaching an all-time high in June, Nvidia’s stock has been largely on a downward trajectory and is currently 21% down from those records.
Major factors for the fall of Magnificent Seven stocks, which all have deep ties with artificial intelligence technology, is the perceived weakness of the U.S. economy and potential recession, which are prompting investors to look for safer assets. Additionally, there are fears that the positive effects from the AI boom will take longer to show than expected.