The group known as the Magnificent Seven, consisting of Alphabet (GOOGL), Microsoft (MSFT), Apple (AAPL), Tesla (TSLA), Meta Platforms (META), Nvidia (NVDA), and Amazon.com (AMZN), has together seen their market capitalization plummet by more than $1.1 trillion in just the past 5 trading days. This marks the largest loss from this group of stocks since May 2022, over two years ago. The following chart, created by Investor's Business Daily, illustrates the individual market cap declines of each company.
In terms of percent losses in these mega-cap stocks, the declines were as follows: Meta stock fell 13.6%, Nvidia 12.5%, Amazon 5.9%, Tesla 5.6%, Google 5.3%, Microsoft 4.9%, and Apple 1.8%. These losses seen in such a short time are substantial when compared to the annualized returns typically seen from broad market indexes. The S&P 500, for instance, has averaged around a 10% annualized return over the last thirty years. This perspective highlights the significance of the selloff experienced by Meta and Nvidia, each seeing over 12.5% losses in just a brief 5-day period. The losses incurred by these companies dragged down the NASDAQ, causing it to suffer a 2.8% decline on Wednesday, marking its largest loss since December 2022. Investors should be mindful of the significant volatility observed in individual companies and the tech-focused NASDAQ, which can deliver outsized returns but also substantial losses.
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