Stock market crash: Meta and Nvidia lose $750 billion, tech falters!

Technology giants Meta and Nvidia have seen more than $750 billion erased from their market capitalization compared to their recent highs. This massive correction shakes the markets and raises concerns about the strength of the tech sector, which until now has been the engine of the rising trend.

Meta collapses by 19% after disappointing results

Meta’s stock plummeted by 19% following the release of quarterly profits down by 19%. A historic dive which caused a loss of $240 billion in market value in one session, an all-time record. Meta had already suffered a similar debacle on February 3, 2022, erasing then $232 billion.

During the earnings call, CEO Mark Zuckerberg highlighted advances in AI, mentioning Meta’s Llama language models and the Meta AI conversational agent. However, he primarily focused on the heavy losses of the Reality Labs division, dedicated to the metaverse. This sector reports $3.85 billion in losses this quarter and has accumulated $45 billion in losses since the end of 2020.

While Zuckerberg promises that, in the long run, these bets will generate massive revenue, he admits they will require “multiyear investments” before becoming profitable. A too distant horizon for Wall Street, which fears the group will burn its cash in these uncertain projects. Especially since Meta predicts a significant increase in investment spending in 2024.

Nvidia hit by the tech shockwave

The semiconductor manufacturer Nvidia has not been spared from the storm hitting technology stocks. Its significant stock drop has contributed to a wipeout of hundreds of billions from the sector’s market capitalization.

This collapse of tech giants sparks fears of a domino effect on the entire market, of which they are a major part. Their tumble questions the strength of the stock market structure they’ve been propping up for months. Is the party over for tech?

The crash of Meta and Nvidia raises questions about the future of technology stocks, which have been the locomotive of the markets for years. If these pillars of the stock market were to crumble permanently, it could bring the entire upward trend to a halt.

The coming sessions will be crucial to evaluate the resilience of the indices to the heavy losses of the tech behemoths. A spread of doubt to the rest of the market would mark the end of speculative euphoria that has been driving the trend.