After two years of relentless growth, AI heavyweights have experienced a sharp decline in stock value over the past two months. This downturn was driven by the U.S. government’s expanded export restrictions on AI chips to China, expectations of future interest rate cuts, concerns over inflated valuations, and mixed earnings reports. Just as these companies appeared to be on the path to recovery, a new setback hit in September.
According to data from Stocklytics.com, the largest AI firms—Microsoft, Alphabet, Nvidia, and Meta—have collectively lost nearly half a trillion dollars in stock value in less than a week.
Nvidia Leads with $320 Billion Stock Value Drop in Five Days
The second half of 2024 has been turbulent for AI giants. After adding more than $3.8 trillion to their stock values in the first half of the year, a tech selloff in July wiped out nearly 45% of those gains.
Fresh concerns about slow returns on large AI investments hit the sector hard in early September, with some companies experiencing their steepest one-day losses. The fading investor optimism about artificial intelligence has resulted in hundreds of billions of dollars in new losses.
According to Stocklytics, Microsoft, Nvidia, Alphabet, and Meta collectively shed a staggering $490 billion in stock value over the past five days, with Nvidia bearing the brunt of the losses. Nvidia’s stock value dropped by $320 billion during this period, representing 65% of the total loss. As of August 31, Nvidia’s market cap stood at $2.93 trillion, which has now fallen to $2.61 trillion.
While other AI giants also saw significant losses, they were much smaller in comparison. Alphabet’s stock value declined by $90 billion over the past week, dropping from $2.02 trillion to $1.93 trillion. Microsoft lost $60 billion, bringing its market cap down to $3.04 trillion. Meta followed with a $20 billion drop, leaving its stock value at $1.3 trillion this week.
In a surprising turn, Tesla, typically the worst performer among the AI heavyweights, saw its market cap increase by nearly $17 billion since last week, reaching $700 billion once again.
Over 60% of Half-Year Gains Erased in Two Months
The September losses pushed the combined two-month decline of AI companies to staggering levels. Since July, Microsoft, Nvidia, Alphabet, Meta, and Tesla have collectively lost $2.36 trillion in market value, wiping out over 60% of their half-year gains.
Although much attention has been on Nvidia, Meta has suffered the largest decline in the past two months, losing $780 billion in stock value—$150 billion more than Nvidia. Nvidia’s market cap has fallen by $630 billion during this period. Both Microsoft and Alphabet have seen stock value drops of around $430 billion each, while Tesla has shed roughly $89 billion.