Big Tech Companies Including Apple Lose Over $1 Trillion in Market Cap in Just 3 Trading Days

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Amid the continued decline of tech stocks in the U.S. New York stock market, the market capitalization of major tech giants such as Apple, Tesla, and Microsoft (MS) has evaporated by more than $1 trillion (approximately 1,277 trillion KRW) in just three trading days. While tech stocks continue to fall without showing signs of bottoming out, some tech companies like Uber have started tightening their belts, aiming to reduce costs and improve profitability.

According to CNBC and other sources on the 9th (local time), Apple, the largest tech company by market capitalization, lost $220 billion in corporate value over three trading days. Following Apple, Tesla lost $199 billion, Microsoft $189 billion, Amazon $173 billion, and Alphabet $123 billion in market cap. Nvidia and Meta Platforms, the parent company of Facebook, also saw their market caps shrink by $85 billion and $70 billion respectively during the same period.

CNBC reported that since Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), mentioned at the Federal Open Market Committee (FOMC) regular meeting press conference on the 4th that "inflation is too high," tech stocks have experienced further sharp declines. Since the 4th, a combination of rapid interest rate hikes, high inflation, China’s COVID-19 lockdowns, and the Ukraine war has increased recession concerns, causing the Nasdaq index to drop more than 10% in just three trading days.

The market is divided on the outlook for tech stocks, which have been declining since peaking in November last year. Some view the current downturn as a temporary correction following the tech stocks’ soaring during the ultra-low interest rate era triggered by COVID-19, while others believe further declines are imminent.

The deterioration in tech stocks is also impacting tech companies that went public (IPO) or listed last year. CNBC analyzed 53 such companies and found that the stock prices of 50 of them are trading below their IPO prices. Major U.S. virtual asset exchange Coinbase, free stock trading platform Robinhood, and electric vehicle manufacturer Rivian have all seen their stock prices fall by more than 50%. CNBC noted, "The IPO market has dried up over the past four months, and there are no notable tech-related IPOs expected in the second quarter."

As the market worsens, tech companies have begun cutting costs and strengthening profitability.

Dara Khosrowshahi, CEO of Uber, the largest ride-hailing service in the U.S., said in an email to employees yesterday that after the recent earnings announcement, he met with investors in New York and Boston and acknowledged that "the market is undergoing a major tectonic shift, and we need to respond accordingly." He added, "The least efficient marketing and incentive expenses will be canceled," and "We will treat hiring as a privilege and be cautious about when and where to increase our workforce."

Earlier, Meta Platforms announced in an internal memo to employees on the 4th that it plans to halt or reduce hiring for mid-level and senior positions. Brian Olsavsky, Amazon’s Chief Financial Officer (CFO), also hinted at a shift in hiring stance at the end of last month, stating, "We are rapidly transitioning from a labor shortage to an excess labor situation." Additionally, Netflix, which has raised concerns about the streaming industry's growth potential due to recent subscriber declines, has started laying off some team members, and Robinhood plans to reduce its full-time staff by 9%.

This content was produced with the assistance of AI translation services.