New York, USA – Nvidia’s stock price plummeted by 10% on Friday, contributing to a challenging week for US stock markets, marking the worst performance since October 2022. Investors showed a reluctance to take risks ahead of a series of Big Tech earnings scheduled for the following week.
The chipmaker experienced its most significant drop since March 2020, resulting in a loss of more than $200 billion in market value in a single day. This decline alone made up about half of the overall 0.9% decrease in the S&P 500 on Wall Street, according to data from Bloomberg. Other tech giants like Netflix also saw a downturn, with losses of up to 9% following a decision not to disclose subscriber numbers regularly.
Stocks linked to artificial intelligence technologies, including Advanced Micro Devices, Micron Technology, and Meta, also faced declines, closing between 4.1% and 5.4% lower. Even Super Micro Computer, a company in the server equipment sector expected to benefit from the AI trend, closed the day with a substantial 23% decrease.
The downward trend in the market on Friday was influenced by concerns over possible minimal reductions in interest rates by the US Federal Reserve this year or no cuts at all. Tensions between Iran and Israel further fueled investor anxiety, impacting the overall market sentiment. However, experts attributed Friday’s sell-offs to investors repositioning their portfolios hastily ahead of upcoming Big Tech earnings announcements.
Analysts highlighted that the stock market pullback was not primarily driven by interest rates but rather by the anticipation of slower earnings growth in the tech sector. As major companies like Microsoft, Alphabet, Meta, and Nvidia prepared to release their quarterly results in the following weeks, concerns arose about meeting high expectations amidst challenging yearly comparisons.
With expectations of 42.1% EPS growth for the first quarter of this year compared to the peak of 68.2% in the previous quarter, the so-called Big 6 companies will face a tough quarter-on-quarter performance evaluation. The S&P 500 index on Wall Street closed the week with a 0.9% decline, marking its worst performance in over five months and experiencing a consecutive daily drop since last Friday. Leaders in trading firms noted a significant shift as “dip-buyers” appeared hesitant, creating a more challenging market environment.