Shares of the Magnificent Seven plummeted on Monday amid a global stock market rout, while shares of Apple (AAPL) and Nvidia (NVDA) were further exacerbated by the news.
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Nasdaq enters correction after market disappoints; look to CBOE, Ferrari, MercadoLibre
Nvidia shares plunged 7% early Monday, hitting their lowest level since May 22, after the company told Microsoft (MSFT) and another major cloud customer that shipments of its Blackwell B200 AI chips would be delayed due to a design flaw discovered late in the production run. The news was reported Saturday by The Information, citing Microsoft employees and other sources.
Nvidia has been performing well this year, with shares soaring after the AI giant beat Wall Street expectations in the first quarter and also gave a better-than-expected outlook for the current quarter. The company also announced a 10-for-1 stock split that will take effect on June 10.
The tech giant is an IBD Leaderboard stock. Nvidia shares rose above a split-adjusted buy point of 92.22, sending the stock to an all-time high. Nvidia shares also rose above a split-adjusted entry point of 97.40, but gave up all of the gains from those buy triggers.
Apple shares fell 7% on Monday after Warren Buffett’s Berkshire Hathaway (BRKB) disclosed that it held $84.2 billion worth of Apple stock as of June 30. This means the iPhone maker’s shares fell 49.4% in the second quarter.
Apple shares dipped below the 199.62 buy point of their June 11 breakout, triggering a round-trip sell signal. But the stock pared losses to about 5% in morning trading.
The Magnificent Seven will have a major impact on the stock market
The “Magnificent Seven” — Apple, Microsoft, Google parent Alphabet (GOOGL), Amazon.com (AMZN), Nvidia, Meta Platforms (META), and Tesla (TSLA) — lived up to their name with big gains in 2023. But early in the third quarter of 2024, the returns of the stocks diverged and the whole group was sold off.
Due to their outsized market capitalizations, the Magnificent Seven’s stocks have a disproportionate influence on the market-cap-weighted Nasdaq Composite and S&P 500 indexes.
For more on this issue, see IBD’s “Magnificent Seven” page on weightings, market caps, and the latest news for each company.
7 stocks with impressive performances
Company Symbol 2024 YTD Performance Alphabet (GOOGL) +24.0% Amazon (AMZN) +28.4% Apple (AAPL) +18.2% Meta Platforms (META) +44.9% Microsoft (MSFT) +20.9% Nvidia (NVDA) +157.3% Tesla (TSLA) -3.0% Source: IBD Data as of July 12, 2024
Magnificent 7 Stocks: Amazon Falls Below Buy Point
Amazon.com Inc. (AMZN) shares fell 4% on Monday, sliding further below their long-term 200-day moving average.
Last week, the e-commerce giant reported mixed results for the second quarter.
Profit beat expectations, but revenue fell short of estimates, despite a stronger-than-expected contribution from Amazon’s cloud-computing division. The tech giant’s revenue forecast also fell short of expectations.
Through its Amazon Bedrock platform, the e-commerce and cloud giant offers a fully managed service that provides a choice of high-performance foundational models (FMs) from leading AI companies such as AI21 Labs, Anthropic, Cohere, Meta, and Stability AI.
Be sure to read how to use IBD’s new exposure levels to adapt to changing market conditions.
Dow Jones stocks: 7 surprise winners: Apple, Microsoft
Two Dow Jones stocks, Apple Inc. and Microsoft Inc., are included in the Magnificent Seven.
Late Thursday, Apple reported better-than-expected third-quarter results, driven by record services revenue and strong iPad sales.
Software giant Microsoft on July 30 reported fourth-quarter earnings that slightly beat Wall Street targets, but Azure cloud computing growth disappoints, and the company also gave a weak revenue outlook for the current quarter.
The stock fell 3% in trading on Monday, well below a 430.82 buy point in a flat base and its 200-day line.
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