Major artificial intelligence companies lost more than $1 trillion in market value this week as investors pulled back from high valuations. The Nasdaq Composite is set to drop more than 4.5% this week, its worst performance since April. The S&P 500 is also down more than 2.7% for the week, its biggest loss since May.
Tech Giants Lead Market Decline
According to NBC News, the drop in shares of Microsoft, Nvidia, AMD, Palantir, Oracle and Meta Platforms erased more than $1 trillion of market value. Nvidia and AMD each fell more than 11% this week. Oracle dropped about 10%. Meta is down 7% and Microsoft fell 4% as of Friday morning.
Super Micro Computer plunged 25% this week. It became the worst performing stock in the S&P 500. The company sells servers and equipment that cloud computing providers use for AI. The S&P 500 technology sector shed 6% this week, double the loss of any other sector.
Some Tech Stocks Hold Steady
Not all tech stocks performed poorly. Apple, the second largest company in the world behind Nvidia, is set to end the week flat. Alphabet and Amazon only declined around 1.5% this week. For the year, the Nasdaq and S&P are still holding substantial double-digit gains.
Multiple Factors Drive Sell-Off
The sell-off started Tuesday after government contractor Palantir reported earnings. Fears that it was too highly valued led the stock to plunge in following days. It dragged its peers lower with it. Two top Wall Street CEOs warned that a market pullback could be on the horizon.
Nvidia CEO Jensen Huang told the Financial Times on Thursday that China would likely win the AI race. He later clarified, writing that China is nanoseconds behind America in AI. When reporters asked President Trump if he was concerned about an AI bubble, he said no and noted that the U.S. is leading China and the world.
Consumer sentiment fell to near record low levels on Friday in the University of Michigan’s survey. The ongoing government shutdown has led to a lack of official data for markets. The jobs report scheduled for Friday was not published. That has led investors to rely more heavily on corporate earnings reports and alternative data.
