Berkshire Hathaway (BRK-B), the holding company chaired by business titan and philanthropist Warren Buffett, dumped half of its Apple, Inc. (AAPL) shares over the weekend of 3 August 2024. This, along with US recession concerns, reportedly triggered a sell-off of tech stocks.
Berkshire Hathaway Halves its Stake in Apple Triggering Worries About Tech Stock
Energised by artificial intelligence (AI) and its future possibilities, the stocks of companies such as Apple, Microsoft (MSFT) and Tesla (TSLA) experienced prolonged rallies. A Reuters report indicated that Apple, Tesla, Alphabet (GOOG) , and Amazon (AMZN) shares dropped by more than 4%. Nvidia (NVDA) fell by 7% and Microsoft and Meta Platforms (META) by 3% each.
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Based on LSEG data, the so-called “Magnificent Seven” was on its way to a combined market value loss of roughly $800bn on Monday, 5 August 2924. Reuters quoted Dan Coatsworth, an AJ Bell analyst, who said:
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.
Microchip shares also took a dive. The PHLX Semiconductor Sector (SOX) dropped by 2.6%, and its total loss over the last three sessions was 14%. Nvidia’s published design issues and manufacturing obstacles regarding its new AI processor contributed to diminished investor confidence.
Many are concerned by the high costs of building AI infrastructure. Tepid quarterly earnings reports by Amazon, Microsoft and Alphabet fuelled the growing doubts regarding AI and the tech industry.
Despite these sell-offs, Nvidia, Microsoft and Amazon are still in the green with their annual gains; however, Tesla has dropped 21% this year.
