Magnificent Seven set to shed $1 trillion in value, led by Apple, Nvidia

The share slide followed a weak US payrolls report on Friday that pushed investors to safe assets and spurred bets that the Federal Reserve will have to soon cut interest rates to aid growth.

Over the weekend, Warren Buffett’s Berkshire Hathaway said it had halved its stake in Apple – the conglomerate’s top holding – in a stock-selling spree that raised worries about the outlook for the tech industry.

Meanwhile, Nvidia shares took a hit from a report that the launch of its upcoming AI chips could be delayed by three months due to design flaws, which could impact customers such as Facebook-parent Meta, Alphabet’s Google and Microsoft.

After driving gains on Wall Street for more than a year, big technology stocks have come under pressure in the past few weeks also on signs that the payoff from hefty AI investments would take longer than some investors had initially hoped.

Shares of Amazon, Microsoft and Alphabet – the three biggest providers of cloud-computing services – fell as their earnings reports dashed big bets of hefty AI investments translating quickly into growth.

“Expectations have arguably become too high for the so-called Magnificent Seven group of companies. Their success has made them untouchable in the eyes of investors and when they fall short of greatness, out come the knives,” Dan Coatsworth, investment analyst at AJ Bell, said.