With tech powerhouses overspending on AI, the economy could take a huge hit. Investors hold reasonable doubts- where is the future of tech actually headed?
At the epicenter of every tech innovation, economic impact, or consumer trend is at least one of these powerhouses. Their dominance over the market doesn’t merely impact the buyer-seller behavior but also determines most market conditions.
What happens when the “Magnificent Seven” loses billions in market value? There’s a carnage on the Wall Street.
Deemed as the Manic Monday, these tech companies collectively lost more than 750 billion dollars of market value. Apple, encountering its highest plummet yet, lost over 174 billion dollars, followed by NVIDIA at 140 billion dollars.
Meanwhile, Tesla faced the steepest percentage drop, i.e., 15%, since mid-December last year. It also lost over 130 billion dollars on Monday.
Following Apple, NVIDIA and Tesla:
- Microsoft’s market cap shrank by 98 billion dollars,
- While Alphabet dropped over 4%,
- And Meta and Amazon lost 70 billion and 50 billion dollars each, respectively.
Tech has been driving a significant portion of market growth in the last few years. But these tech powerhouses lost a substantial share of their value his week, marking one of the worst single-day losses in Wall Street’s history.
The reason behind this could be the growing concerns over a possible recession. And a crucial shift in investor sentiment regarding these tech giants’ aggressive spending on newer AI projects and infrastructures.
The market plunge has incited an intense conversation concerning the long-term sustainability of these investments and whether they would ripen into any positive outcomes.
What is the future of AI, and how is it set to influence the world economy in the upcoming years?