The end of the second quarter of the calendar year 2024 has brought about a tectonic shift on Wall Street, at least in terms of the perception that is being constructed.
Tech Stocks Suffer
The second quarter ended on June 30, and the subsequent results that were declared have shed light on the performance of many important tech firms, which has led to their shares being affected as well.
Many of the important names, including the 'Magnificent Seven', which includes the likes of Amazon, Tesla, Microsoft, Google, Apple, Nvidia and Meta, have taken the hit.
Elliot Management, an American Hedge Fund company, has issued caution against AI-driven tech companies and their prospects. Elliot even went on to add that companies like chip maker Nvidia are in a 'bubble land'.
This has led to long-held concerns and speculations over the veracity and tangibility of the AI gold rush and its future prospects. These concerns have now been emboldened by the quarterly performance of the companies in question.
The astronomical rise has been brought to a grinding halt. |
The poor performance of these companies naturally brought marquee American indices like Dow Jones, S&P 500 and Nasdaq, which are reliant on them, down as well.
A lot of the focus is on Nvidia, the Jensen Huang-led company, as the chip giant has lost 14.75 per cent or USD 18.56, of its share price value in just the past one month. This diminishes a lot of the gains the company made in the previous months.
Mark Zuckerberg Meta also swimmed in red. |
Shares of Satya Nadella-led Microsoft |
In addition, Meta, another company that has bet big on AI, has also been affected. The company shares have also suffered in the past month. The Mark Zuckerberg-led group's fortunes have declined by 9.59 per cent or USD 51.77.
Microsoft, another big tech firm that has gone big with its deep pockets, also appears to have burned its hands so far. The company shares also dropped by over 10 per cent, more precisely, by 12.63 per cent or USD 59.07—in just a month.
One of the major reasons behind this decline across the board is a consolidation of doubt regarding whether Artificial Intelligence is really the kind of revolutionary beacon of revenue generation that it has been touted to be.
Many have drawn parallels with the 'dot.com bubble' that brought about gargantuan losses to many enterprises at the turn of the 21st century.
