Tech Stock Troubles: NVIDIA Records Second Biggest Daily Loss in History Amid Market Turmoil

Shares of major technology companies ended the week trading lower for the sixth day in a row, in the longest streak of declines for the major U.S. market share since October 2022, while shares of Nvidia, the designer of computer chips used in applications. , recorded… artificial intelligenceThe second largest daily loss in market value in US stock history.

The S&P index recorded its worst weekly performance since March 2023, falling more than 3%, amid growing uncertainty over the path of inflation and monetary policy. It was also the third negative week in a row for the index of large companies, and the largest share of its decline was contributed by downward pressure from stocks of technology companies, as the sector was the worst performer within the index, on Friday, and throughout the week.

The index went down Nasdaq The week was filled with technology companies, declining by 5.5%, recording the fourth week of losses in a row, in the longest streak of weekly losses since January 2022. The week saw the worst weekly performance for the Nasdaq since November 2022.

Nvidia’s share price fell 10% in trading on Friday, in its worst session since March 2020, taking the company’s market value down by more than $212 billion. Stock trading on the last day of the week saw a clear case of avoiding most types of… Risky assetsahead of a wave of earnings data from major technology companies, expected to be announced next week.

Netflix shares also fell about 9% on the day after the streaming service announced plans to stop regularly disclosing its subscription numbers, which overshadowed stronger-than-expected profits in its ‘ first quarter of the year. The Nasdaq index ended Friday’s session with a decline of more than 2%.

On Friday, stocks that had risen on investor enthusiasm for artificial intelligence suffered, as Advanced Micro Devices, Micron, and Meta closed down 5.4%, 4.6%, and 4.1%, respectively. Super Microcomputer, the server equipment group seen as a beneficiary of the rise in artificial intelligence, lost nearly a quarter of its market value on Friday, but remained up nearly 150% from its opening price the year.

“It’s a tough day for technology stocks,” Kevin Gordon, chief investment strategist at Charles Schwab, said in a note. start solving.”

Friday’s moves come as investors begin to warm to the possibility that the US Federal Reserve will cut interest rates by just a quarter of a point this year, or perhaps not at all. Retaliatory strikes between Iran and Israel also increased investor anxiety, causing stock markets to decline.

But analysts said Friday’s selloff was driven by investors quickly reorganizing their portfolios ahead of big tech company results next week.

“The stock decline has less to do with interest rates and more to do with investors pricing in slow earnings growth for big tech companies,” Deutsche Bank Strategist Parag Thatte said in a note.

“There is no pressure on interest rates” without any new Fed announcements, but stocks are pressured by earnings expectations, Andrew Brenner, head of international fixed income investments at NatAlliance Securities, told 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. While all companies are expected to do well, seasonal comparisons are difficult.

Year-over-year earnings per share growth for Nvidia, Meta, Microsoft, Amazon, Alphabet, and Apple will reach a peak of 68.2% in the fourth quarter of 2023. UBS analysts expect… The Swiss bank expect the six largest companies to post earnings per share growth of 42.1% on average for the first three months of this year.