The gains did not erase the US$3.4 trillion in value the companies have collectively shed since their peak in late 2024. — Reuters
SAN FRANCISCO: The “Magnificent Seven” stocks amassed more than US$1.5 trillion in market value after US President Donald Trump paused his sweeping tariffs for 90 days, easing pressure on tech giants that had tumbled in recent sessions.
The gains did not erase the US$3.4 trillion in value the companies have collectively shed since their peak in late 2024, with some US$2 trillion of those losses coming since last week after Trump slapped tariffs on imports from countries including major tech market and exporter China.
But the reprieve gave investors a reason to buy back these expensive stocks, whose valuations had reached stratospheric levels as the companies bet billions of dollars on building out artificial-intelligence infrastructure.
Shares of the companies – artificial intelligence (AI) chip giant Nvidia, Apple, Tesla, Microsoft, Alphabet, Facebook-parent Meta and Amazon – closed up between 9.68% and 22.69%, powering a market rally that pushed the Nasdaq up more than 12%.
Besides roiling markets, tariffs have cast a pall on businesses’ spending on AI-powered tools and services offered by the tech giants. Wall Street will scrutinise budgets and expenses when businesses report quarterly results starting later this month.
Alphabet on Wednesday reiterated it would spend about US$75bil this year to build out data centre capacity, while Microsoft has said it was on track to spend more than US$80bil to develop its datacentre infrastructure. — Reuters
