what happened
Stocks of some of the world’s largest tech companies slumped on Friday after bringing positive profits to the market for a few days.Semiconductor specialist Nvidia (NVDA -1.45%). iPhone makers were down 5.5% Apple (AAPL -0.50%). 4.5% off, e-commerce kingpin Amazon (AMZN -1.48%). It slipped 3.5%.
Stocks recovered slightly, but as of 2:44 pm, stocks fell 4%, 3.6% and 2.2%, respectively.
New warnings about the possibility of a recession have caused a large number of stocks to fall today, but there was also company-specific news about each of the tech proponents.
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So what
Tesla CEO Elon Musk has joined a choir of business leaders who are warning about the potential for the economy and recession. According to a Reuters report, Musk acknowledged in an email to staff that it had “very bad feelings” about the economy and decided to cut 10% of the staff of electric vehicle (EV) makers. rice field.
This happened shortly after a similar disastrous warning by vocals. JPMorgan Chase CEO Jamie Dimon, who said at a recent meeting that the company is preparing for this year’s economic “hurricane,” was boosted by rising inflation and the war in Ukraine.
These statements became heavier on Friday’s Wall Street, Nasdaq Composite Index And that S & P 500 It decreased by 2.3% and 1.4%, respectively (at the time of writing this article). Still, there were company-specific issues that helped tech triads fall in stock prices.
Morgan Stanley Analyst Katy Huberty delves into the latest data provided by Sensor Tower, Apple’s App Store sales growth slowed last month, and revenue growth increased from an estimated 8% in April to 4% year-on-year. I concluded that it had declined. Huberty said the slowdown is widespread in most regions, except in the US market. Evercore Analyst Amit Daryanani has similar concerns, noting that the slowdown is “slightly surprising” given the expected acceleration of growth.
Amazon has announced that Worldwide Consumer CEO Dave Clark will leave the company “to pursue other opportunities.” Clark has been with Amazon for 23 years. He joined the company in just one day after completing the MBA program. Clark said in an email to his team that it was time for him to “start a new journey.” He shared his decision with his family and friends and admitted that he had planned a move for some time, but he was waiting for the right time.
CEO Andy Jassy has not yet appointed a successor, but may announce it in the coming weeks.
Finally, if the report is believable, users may have to wait a bit longer for Nvidia’s next-generation ray tracing chips. The RTX 40 series is rumored to be in testing and will be released as early as September. However, the latest scuttlebutt suggests that many steps remain before semiconductors begin the manufacturing process and that development is still underway.
If the latest rumors are true at least Late 2022, before the chips hit the store shelves.
So
It’s important to put all this news in context. Recession drum beat warnings may be on the rise, but it will take at least another month to be certain.it takes 2 A series of quarters of decline in gross domestic product (GDP) to mark the beginning of a recession. US GDP fell 1.4% in the first quarter, so it’s still unclear if the economy is actually at the beginning of a recession. If that turns out to be the case, it’s important to remember that this is all part of the normal business cycle.
In addition, each of these company-specific developments is part of normal business operations and is clearly short-term in nature. There is no doubt that App Store sales will change from month to month. Company executives come and go, and the R & D cycle depends on the product.
That said, Amazon is the undisputed leader in e-commerce and cloud computing, Apple is making more money on smartphones than any other company, and Nvidia is the leader in gaming graphics processing units. There is a reason to be When Data center.
With growing concerns about a recession, there is no doubt that some shareholders are making a profit after the recent surge. It should make no difference to a knowledgeable investor with a long-term perspective.