2024-04-20 19:06:42
US tech stocks are struggling…and NVIDIA posts second largest daily loss in history
Shares of big tech companies ended the week lower for the sixth straight day, in the longest run of declines for the pivotal U.S. market sector since October 2022, while shares of Nvidia, the designer of computer chips used in applications, recorded… Artificial intelligenceThe second largest daily loss of market value in the history of U.S. stocks.
The S&P index recorded its worst weekly performance since March 2023, down more than 3%, in a context of growing uncertainty over the evolution of inflation and monetary policy. It was also the third consecutive negative week for the large companies index, and most of its declines were due to downward pressure from technology company stocks, as the sector was the worst performer of the index, Friday, and throughout the year. week.
The index fell Nasdaq The week was filled with tech companies, down 5.5%, posting their fourth consecutive losing week, part of the longest weekly losing streak since January 2022. The week witnessed the worst weekly performance of Nasdaq since November 2022.
Nvidia’s stock price fell 10% on Friday, in its worst session since March 2020, lowering the company’s market value by more than $212 billion. Stock trading on the last day of the week witnessed a clear case of avoiding most types of… Risky assetsahead of a wave of earnings data from big tech companies, expected to be announced next week.
Netflix shares also fell regarding 9% a day following the streaming service announced plans to stop regularly disclosing its subscriber numbers, which overshadowed the higher-than-expected profits it had made during the first quarter of the year. The Nasdaq index ended Friday’s session down more than 2%.
Stocks that had risen on investor enthusiasm for artificial intelligence suffered on Friday, with Advanced Micro Devices, Micron and Meta closing down 5.4%, 4.6% and 4.1%, respectively. . Super Microcomputer, the server equipment group considered a beneficiary of the artificial intelligence boom, lost nearly a quarter of its stock value on Friday, but remains up nearly 150% compared to its early share price. of the year.
“It’s a tough day for tech stocks,” Kevin Gordon, chief investment strategist at Charles Schwab, said in a note. “Everything that was going well earlier this year is starting to fall apart.”
Friday’s moves come as investors begin to take seriously the possibility that the U.S. Federal Reserve will cut interest rates by just a quarter point this year, if at all. The retaliation between Iran and Israel has also increased investor anxiety, leading to a decline in stock markets.
But analysts say Friday’s sales were driven instead by investors hastily reshuffling their portfolios ahead of next week’s earnings from big tech companies.
“The decline in stocks has less to do with interest rates and more to do with investors expecting slow earnings growth at big tech companies,” Deutsche Bank strategist Parag Thatte said in a note.
“There is no relative pressure on interest rates” in the absence of new Fed announcements, but stocks are being crushed by earnings expectations, said Andrew Brenner, head of international investments fixed income at NatAlliance Securities, at CNBC Economics.
Microsoft, Alphabet and Meta will announce their first quarter business results next week, while Nvidia’s results are expected to be announced at the end of May. Although all companies are expected to perform well, they face difficult quarterly comparisons.
The annual earnings per share growth of Nvidia, Meta, Microsoft, Amazon, Alphabet and Apple reached a peak of 68.2% in the fourth quarter of 2023. UBS analysts expect… The Swiss bank will expects the six largest companies to report earnings per share growth of 42.1% on average for the first three months of this year.
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