Value of big techs falls by US$200 billion with weak results – 10/26/2023 – Market

The market value of technology giants, which drove the rise of American stock markets this year, has already fallen by US$200 billion due to the impact of weak balance sheets, and this could lead to a correction in the S&P 500 index.

Alphabet, owner of Google, Tesla and Meta, which controls Facebook and Instagram, have sunk since releasing earnings. Microsoft has been the only exception so far.

Amazon releases results after the market closes this Thursday (26), and options on the stock indicate a movement of 8.1% in either direction — that is, around US$100 billion more or less.

The remaining two — Apple and Nvidia — release results in November.

The seven companies have been the talk of the year in the stock market, with a frenzy of interest surrounding artificial intelligence. But optimism waned with high interest rates and war in the Middle East. The S&P 500 has already fallen 8.8% since its high of the year. A 10% drop from the peak is considered a correction in a bull market.

The seven-dominated Nasdaq 100 index is still up 31% for the year, meaning there’s plenty of room for the market to fall.

Alphabet alone was responsible for a loss of almost US$180 billion in market value this Wednesday (25), after its cloud unit recorded a lower profit than expected. It was the largest single-session market value loss for the company.

Earlier this month, Tesla’s value shrank by $72 billion in just one day after its results.

For now, the only well-received balance sheet among the seven was that of Microsoft. The Windows maker rose and added around US$75 billion in market value on Wednesday (25), after publishing results that exceeded expectations.