--- title: "High expectations lead to trouble? The \"Seven Sisters\" of the US stock market evaporated over $760 billion overnight!" description: "US tech stocks plunged significantly due to lower-than-expected performance, with tech giants such as Tesla, NVIDIA, and Alphabet experiencing sharp declines in stock prices, causing a total market va" type: "news" locale: "en" url: "https://longbridge.com/en/news/209814322.md" published_at: "2024-07-25T10:37:37.000Z" --- # High expectations lead to trouble? The "Seven Sisters" of the US stock market evaporated over $760 billion overnight! > US tech stocks plunged significantly due to lower-than-expected performance, with tech giants such as Tesla, NVIDIA, and Alphabet experiencing sharp declines in stock prices, causing a total market value evaporation of over $760 billion for seven companies. The market's high expectations for tech stocks led to this adjustment, as individual tech companies' performance falling below expectations shattered market fantasies. In the coming weeks, Apple, Microsoft, Amazon, and Meta will announce their performance, which will have an impact on the US stock market. The high investments by tech giants in artificial intelligence and cloud infrastructure demonstrate their advantage in seizing opportunities in this AI cycle Underperforming results have become the fuse for the high expectations backlash of US tech stocks. The US stock market plummeted on Wednesday, with large-cap tech stocks bleeding heavily. At the close on Wednesday, the Dow fell by 1.25%, while the tech-heavy Nasdaq plunged by over 3.64%, marking the largest single-day drop since December 2022. The "Seven Sisters" of tech stocks all suffered defeats, with Tesla (TSLA.US) plummeting by 12.33%, NVIDIA (NVDA.US) dropping by 6.8%, and Google-C (GOOG.US) falling by over 5%. Overnight, the combined market value of the "Seven Sisters" evaporated by over $760 billion! **Are market expectations too high for tech stocks?** Amid the AI frenzy, the "Seven Sisters" of tech stocks have significantly increased their fundraising capabilities in the capital markets, contributing to the Nasdaq's brilliant performance this year. One major reason for this deep adjustment in the US stock market is that the underperforming results of individual tech stocks have shattered the market's fantasies. Financial reports show that Tesla's deliveries in the second quarter of this year dropped by 4.76% year-on-year, performing below expectations. The revenue from car sales decreased by 9.25% annually, a larger decline than the delivery volume. Additionally, the launch of Tesla's autonomous taxi service will be delayed until October 10, intensifying market concerns. Furthermore, in the second quarter, Google's YouTube ad revenue was $8.66 billion, significantly below expectations, leading investors to worry about whether Google's massive investment in AI will truly bring returns. The widespread tech stock plunge caught investors off guard, igniting market panic. In the coming weeks, major tech companies such as Apple, Microsoft, Amazon, and Meta will continue to announce their performance. Whether their report cards can ease investor panic will likely impact the direction of the US stock market. Recent reports from consulting firms Dealroom and Flow Partners show that the "Seven Sisters" of US stocks invest as much as $400 billion annually in AI and cloud infrastructure, covering areas from AI chips, large models, to humanoid robots, autonomous driving, AI healthcare, and more. Additionally, according to FactSet's statistics, in the first quarter of this year, the total capital expenditures of Amazon, Google, Microsoft, and Meta reached a new high of $44 billion. The tech giants' ambitious investments aim to seize the initiative in this AI cycle. The capital market is also full of expectations, pushing the growth prospects of tech stocks to new heights. However, overly high market expectations can easily be shattered by reality. Prior to the recent pullback in US tech stocks, many international investment banks such as Goldman Sachs and Citigroup had warned that the risks in the US stock market were increasing. Societe Generale of France even wrote, "The valuation of IT stocks is a time bomb." Additionally, according to Goldman Sachs, companies throwing billions of dollars in the AI field will not trigger the next economic revolution, and may not even match the benefits of smartphones and the internet **Feeling Cold at the Top?** After OpenAI launched ChatGPT in November 2022, the capital market seemed to have discovered a gold mine. AI companies represented by NVIDIA, Microsoft, and other large tech stocks have seen their stock prices continue to rise, further raising market expectations and valuations. At a critical moment when these tech giants are facing a slowdown in profit growth, the high valuations undoubtedly increase the risk of profitability. Some analysts point out that these companies generally have excessively high P/E ratios, and once they are hit by external shocks or black swan events, they will suffer significant impacts. Goldman Sachs stated that large-scale enterprises will eventually be required to prove that their investments will generate income and profits. Failure to meet this expectation will result in a significant drop in valuation and stock prices. The valuations of the three major U.S. stock indexes are also soaring. According to Wind data, over the past decade, the S&P 500 Index, the Nasdaq Index, and the Dow Jones Industrial Average had average P/E ratios (TTM) of 23.83 times, 37.39 times, and 21.82 times respectively. However, they have now reached 26.8 times, 42.2 times, and 28.6 times respectively. Goldman Sachs' tactical strategist Scott Rubner warned that the S&P 500 Index has no choice but to fall next. The adjustment of the U.S. stock market has just begun, so it is not advisable to buy on dips. In fact, starting from last week, the upward momentum of U.S. tech giants has disappeared, and more and more people in the market are choosing to take profits, including many institutions cashing out large amounts. Some institutions had already "taken the money and run" earlier. According to Wind data, in terms of institutional holdings in the second quarter of this year, many tech stocks, including the "Seven Sisters" of tech stocks, have been reduced by institutions, and the number of institutions has also declined. Among them, the number of institutions holding NVIDIA shares decreased from 2684 to 1191, with institutional holdings decreasing by 733 million shares. Jim Covello, the analyst at Goldman Sachs responsible for the technology industry, pointed out in a report, "Although the cost and investment are high, AI technology is still far from being truly useful at the moment. Overbuilding something that the world is not ready for usually ends badly." ### Related Stocks - [NVDA.US - NVIDIA](https://longbridge.com/en/quote/NVDA.US.md) - [AAPL.US - Apple](https://longbridge.com/en/quote/AAPL.US.md) - [MSFT.US - Microsoft](https://longbridge.com/en/quote/MSFT.US.md) - [AMZN.US - Amazon](https://longbridge.com/en/quote/AMZN.US.md) - [GOOGL.US - Alphabet](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US - Alphabet - C](https://longbridge.com/en/quote/GOOG.US.md) - [TSLA.US - Tesla](https://longbridge.com/en/quote/TSLA.US.md) - [.DJI.US - Dow Jones Industrial Average](https://longbridge.com/en/quote/.DJI.US.md) - [.IXIC.US - NASDAQ Composite Index](https://longbridge.com/en/quote/.IXIC.US.md) - [.SPX.US - S&P 500](https://longbridge.com/en/quote/.SPX.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 美國與印尼敲定貿易協議 輸美商品關税降至 19% | 美國與印尼達成貿易協議，印尼輸美商品關税降至 19%。協議於去年 7 月宣佈，印尼在協議前面臨高達 32% 的關税威脅。協議內容包括豁免美國企業遵守自製率規定，並解決美國農產品在印尼的貿易障礙。此外，印尼同意採購價值 330 億美元的美國能 | [Link](https://longbridge.com/en/news/276423471.md) | | OpenAI 新一輪融資或突破千億美元 據報亞馬遜、軟銀、英偉達及微軟參與投資 | OpenAI 即將完成新一輪融資，預計籌集超過 1000 億美元，估值可能超過 8500 億美元。主要投資者包括亞馬遜、軟銀、英偉達和微軟。融資將分階段進行，預計在本年度內完成。亞馬遜可能投資高達 500 億美元，軟銀 300 億美元，英偉 | [Link](https://longbridge.com/en/news/276297991.md) | | 黃仁勳稱將發佈「令世界驚訝」新晶片「所有技術都已經逼近極限」 | 英偉達執行長黃仁勳在接受《韓國經濟日報》採訪時透露，將於 2026 年 3 月 16 日在聖何塞的 GTC 大會上發布一款「令世界驚訝」的新晶片。他表示，所有技術都已逼近極限，但有信心通過團隊合作克服挑戰。新晶片可能基於 Rubin 架構或 | [Link](https://longbridge.com/en/news/276297645.md) | | Waymo 在紐約州撤銷有關機器人出租車擴展的條款後遭受打擊 | Waymo 在紐約州撤銷機器人出租車擴展條款後遭受打擊 | [Link](https://longbridge.com/en/news/276441421.md) | | Eagle Capital Management 增持了大量的亞馬遜股份 | Eagle Capital Management，由 Boykin Curry 領導，已顯著增加其在亞馬遜公司（Amazon.com, Inc.）的股份，增持了 199,465 股。儘管亞馬遜的股票近期波動較大，分析師指出第四季度的業績超出 | [Link](https://longbridge.com/en/news/276406745.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.