It’s a bad day for tech, so bad that the stocks of
Apple,
Nvidia,
Tesla,
and the rest of the Magnificent Seven are sliding. How often does that happen? More often than you think.
With the
Nasdaq Composite
down another 1.2% on Thursday, it’s not a surprise to see tech stocks falling.
Meta Platforms
(META), down 3.3%, is leading the group lower after offering disappointing spending plans, while
Alphabet
(GOOGL), off 1.9%, continues its post-earnings slide.
Amazon.com
(AMZN) shares have dropped 1% ahead of its own release after Thursday’s close, while
Microsoft
(MSFT), Apple (AAPL), and Nvidia (NVDA), have each dropped more than 2%. Tesla (TSLA) is off 1.6%.
Still, the businesses of those companies are different enough that you’d expect a little difference in performance. Nvidia, after all, makes chips; Alphabet is driven by its Google search business, as well as its growth in the cloud; Meta is social media; Apple makes iPhones; Tesla makes cars; Amazon sells stuff and has a big cloud business; and Microsoft does a lot of everything, including the cloud.
Yet they move in tandem quite often. Since Meta went public in 2012, all seven stocks have fallen on the same day 2,436 times out of 9,499 trading days with at least one decliner, according to Dow Jones Market Data, or 26% of the times, by far the largest number of occurrences of the seven possibilities. What’s more the number of days where just one of the stocks falls while the rest rise is particularly small—just 401 occurrences, or 4.2% of the times.
Don’t expect the tech pain to end just yet. Mizuho analyst Jordan Klein notes that right now it feels “like [the] glass [is] totally empty as folks sell first [and] ask questions later. What’s more, and the seven stocks dropping together back this up, he notes that it “feels like [there’s] nowhere to hide right now in TMT as investors care little on any good news and focus on the bad, selling pretty much any and everything that just days prior they loved.”
Only one thin, Klein notes, can reverse the selling now—Amazon’s earnings, particularly what it says about its cloud business. “AMZN and their AWS guide COULD NOT BE MORE IMPORTANT POST CLOSE FOR NEXT MOVE IN TECH in my view,” he writes. “A TON riding on whether they see stabilizing AWS growth around 11% or a change up or down.”
No matter the conclusion, don’t be surprised if all seven stocks take their cue from it.
Write to Ben Levisohn at [email protected]
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