With the official opening of 2023, which belongs to the "seven giants" of the US stock market, these technology giants that have been hot in the past year seem to have suddenly lost their "magic" at the end and beginning of the year
According to the Bloomberg Magnificent 7 Price Return Index, the so-called US tech "Big Seven", including Apple, Amazon, Google's parent company Alphabet, Microsoft, Meta, Tesla, and NVIDIA, have fallen continuously in the past four trading days, setting a record for the longest consecutive decline in a month.
Among them, Apple's stock price has cumulatively fallen by 4.6% during this period, and its market value has evaporated by about $383 billion, which is almost equivalent to the total market value of Samsung Electronics.
At the same time, the Nasdaq 100 index, represented by technology stocks, has also experienced a sustained decline in the past four trading days.
Steve Sosnick, Chief Strategist at Interactive Brokers Group, said, "We don't know if last year's uptrend has completely come to an end, but it's entirely normal for the market to experience a pullback after experiencing the (violent) uptrend we've seen. If it weren't for the year-end factors driving the uptrend, I think we would have seen the frenzy gradually come to an end."
Many industry insiders have also pointed out that the decline of the "Big Seven" in the US stock market at the turn of the New Year may be a signal that investors have reasonable doubts about the sustainability of the 2023 rally. Although this tech giant group surged over 100% last year driven by the AI frenzy, the upward trend in the second half of 2023 has cooled as investors are considering whether the Federal Reserve has the ability to achieve a soft landing in the US economy, which is likely to mean that the Fed's interest rate cuts will be less than the current market expectations.
Sosnick believes that regardless of whether the US economy can achieve a soft landing in the future, the "Big Seven" may not taste the sweetness. "If there is a worse situation than a soft landing, the Big Seven is unlikely to achieve high single or double-digit profit growth. In the case of a soft landing, the Federal Reserve is also unlikely to achieve six rate cuts in the end."
New Year's Waterloo
It is worth mentioning that some members of the aforementioned "Big Seven" in the US stock market also felt the pressure they were facing at the beginning of this year.
Apple's stock price was hit by market bearish pressure this week - Barclays analysts downgraded the stock rating of this tech giant to underweight earlier this week, stating that they anticipate weak demand for iPhones in the future.
Tesla has also fallen 8.8% in the past four trading days, setting a record for the longest consecutive decline in over four weeks. Although Tesla reported on Tuesday that the number of electric vehicles delivered in the fourth quarter exceeded analyst expectations, the company's position as the top seller of pure electric vehicles has been replaced by BYD.
Of course, it is still too early to say that the rise of technology stocks has come to an end. Most of the gains made by these tech giants in 2023 have only recouped the decline of a year ago, with some companies such as Amazon, Google, Meta, and Tesla still having their stock prices below historical highs, indicating that they may still have some room for growth.
However, these tech giants may still have more work to do to maintain their strength in 2024. Sosnick believes that these tech giants not only need to continue showcasing their reliable cutting-edge technologies to the outside world, but also need to continue providing guarantees that can achieve stable profits.
He said, "In December, everyone had already placed an order, and now we must see if the steak is delicious."