- Four Big Tech companies – Apple, Microsoft, Tesla, and Meta – lost a combined $625 billion in market value this month.
- That may be largely due to seasonal trends as August tends to be a weak month for equities, historically.
- The tech selloff comes against the backdrop of a broader decline in US equities, triggered in part by higher bond yields.
It’s been a tough month for Big Tech stocks.
Some of the world’s biggest companies lost hundreds of billions of dollars in market value in August as the US stocks head for its worst month of 2023.
Apple, Microsoft, Tesla, and Meta have seen a combined $625 billion slump in market value so far this month, Insider calculations show. Apple has led the market-cap declines with a $314 billion slump, followed by Tesla with a $117 billion drop, Microsoft with $114 billion and Meta, $80 billion.
The slump contrasts with what’s otherwise been a strong year for stocks, especially Big Tech names, thanks to investor excitement over artificial intelligence. The S&P 500 index of US shares is up 14% year-to-date, even after an almost 5% pullback in August.
Apple’s stock is down 10% this month, while Microsoft slipped 4.6%. Tesla and Meta each fell by close to 13%.
The decline may be largely down to seasonal trends. History shows that August has been the second-worst month of the year for stocks for more than three decades – and it’s especially poor in the year before a presidential election, Insider’s Phil Rosen reported.
Higher interest rates and surging bond yields have also weighed on equities, chipping away at the relative attractiveness of the asset class. Elevated borrowing costs tend to erode the profitability of companies, making their stocks less attractive, while increased bond yields offer investors an option to earn higher returns with less risk.
Debt yields have climbed over the past several quarters as the Federal Reserve has raised interest rates sharply to cool inflation.
Other factors have also weighed on Big Tech stocks in recent months. For Apple, a mediocre earnings report showed that iPhone and iPad sales were declining against a backdrop of slower consumer spending in America.
In the case of Tesla, investors were increasingly concerned that a series of price cuts unveiled by the carmaker this year could be hurting its margins.
While Microsoft, Tesla, Apple, and Meta all saw their market capitalizations take a hit, one tech company has notably defied the trend — Nvidia.
The semiconductor company, known for its GPU chips, has had a stellar year thanks to a strong second-quarter earnings report that showed a 101% jump in revenue from the previous year.