As of August 8 2024 the situation for tech stocks has been a bit up and recently showing some volatility and attempts at recovery. Here’s a quick summary of whats been happening;
Market Performance
Tech stocks had quite a ride in the last week:
On August 5 2024 major U.S. Stock indexes, especially the tech heavy Nasdaq took a big hit. The Nasdaq Composite fell by 3.4% entering correction territory.
By August 7 2024 there was an uptick in tech stock prices as futures for the Nasdaq 100 rose by 1.3% in premarket trading.
However by the end of trading on August 7th the Nasdaq ended up dropping by 1% as tech shares declined.
Key Factors Impacting Tech Stocks
Various factors have been influencing how tech stocks are performing;
Economic Concerns;
Concerns about demand in Treasury auctions have raised worries about the overall economic outlook.
Investors are keeping an eye on economic indicators and are anticipating potential rate cuts from the Federal Reserve due to economic softness.
Earnings Reports;
The quarterly financial reports from tech companies are playing a role, in how individual stocks are doing.
For example Super Micro Computer (SMCI) experienced a drop of 14% after its results and future expectations fell short of market expectations.
Global Market Forces;
The Japanese market went through a lot of ups and downs recently. The Nikkei 225 index dropped by 12% on August 5 marking its performance since 1987. However it bounced back strongly by rising 10.2% on August 6.
This rollercoaster ride in markets also affected U.S. Tech stocks.
Specific Movements in Tech Stocks
On August 7 before the market opened large cap tech stocks showed signs of improvement. Nvidia (NVDA) Microsoft (MSFT) Meta Platforms (META) Alphabet (GOOGL) and Amazon (AMZN) all saw increases of than 1.5%.
However Apple continued its decline falling by 2% on August 5.
The top seven tech giants known as the “Magnificent Seven” – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms and Tesla – collectively lost a $615.6 billion in market value on August 5.
Analysts Views
Experts have differing opinions:
Some analysts like Ross Mayfield from Baird suggest that market volatility will likely stay high in the short term but think concerns about economic growth might be exaggerated.
Others such as Frank Cloud, from Equity recommend that investors keep portfolios. Despite predictions of recession they point out that the U.S. Economy has shown resilience.
How recent earnings reports have impacted tech stocks this week:
Mixed Performance:
Tech stocks have shown mixed performance this week, with significant volatility observed. The Nasdaq Composite experienced a sharp 3.4% decline on August 5, entering correction territory
Attempted Recovery:
There were signs of recovery attempts, with Nasdaq 100 futures up 1.3% in premarket trading on August 7. However, by the end of that trading day, the Nasdaq closed down 1% as technology shares declined again
Specific Stock Movements:
- Large-cap tech stocks like Nvidia (NVDA), Microsoft (MSFT), Meta Platforms (META), Alphabet (GOOGL), and Amazon (AMZN) showed signs of recovery in premarket trading on August 7, all up more than 1.5%
- Apple continued its downward trend, dropping nearly 2% on August 5
- Super Micro Computer (SMCI) saw a 14% drop after its results and outlook missed expectationS.
Upcoming Earnings:
Several major tech companies are scheduled to report earnings soon, which could further impact the sector:
- Nvidia is expected to report on August 28, 2024
- Other tech companies like Applovin Corporation (APP) and HubSpot, Inc. (HUBS) reported their earnings on August 7 after market closE.
Overall Market Impact:
The “Magnificent Seven” tech companies (which include Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla) collectively lost $615.6 billion in market value on August.
In conclusion, this week has seen significant volatility in tech stocks, with some attempted recoveries amidst overall market uncertainties. The sector remains sensitive to earnings reports and economic factors, with upcoming earnings announcements likely to play a crucial role in short-term market movements. Although technology stocks have made some progress in bouncing they are still vulnerable to considerable fluctuations because of uncertain economic conditions, worldwide market impacts and factors specific to individual companies. It’s important for investors to remain watchful and spread out their investments, in this market setting
Disclaimer: This is not an Investment Advice. Investing and trading in currencies involve inherent risks. It’s essential to conduct thorough research and consider your risk tolerance before engaging in any financial activities.
