Magnificent 7, still falling on Fri (04 Apr) ?
By now everyone would have been fully aware of US market Thu, 03 Apr 2025 catastrophic fall, the biggest slide in US equities in 5 years, on fears that Trump’s new tariff plans will:
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Trigger a global trade war.
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Drag US economy into recession.
By the time, 4pm came around - each composite index was progressively worse than the one before:
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DJIA: -3.98% (-1,679.39 to 40,545.93).
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S&P 500: -4.84% (-274.45 to 5,396.52). Down more than -10% from its February all-time high.
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Nasdaq: -5.97% (-1,050.44 to 16,550.61).
Stocks lost roughly $3.1 trillion in market value, their largest one-day decline since March 2020.
Stock-index futures drifted lower on Thursday evening as well.
Magnificent 7 - Not looking good.
THe Mag 7 were not spare deither.
Thursday’s sell-off hit megacap technology stocks especially hard, with CNBC’s Magnificent Seven index sliding more than -6%. (see below)
Collectively, the “Magnificent Seven” stocks, that had led the market higher in both 2023 and 2024, lost more than -$1 trillion in market value.
Magnificent Seven - past month performances
Individually how badly did each Mag 7 stock fare ?
Let’s find out.
Apple Inc fell by -9.25%.
Apple led the megacap cohort’s charge downward, sliding more than 9% amid concerns that Trump’s broad plan for levies would hurt the personal technology giant given its production abroad. Apple notched its worst day in more than half a decade.
$Apple(AAPL)$ experienced a sharp -9.25% decline in its stock price due to fears over new US tariffs, that heavily impact its global supply chain.
The stock opened at $205.18, falling from its previous close of $223.89, and hovered around $203 by midday.
Analysts predict continued weakness on Fri, 4 Apr 2025, with the stock expected to trade within a volatile range of $196.26 to $210.12 due to technical and market pressures
Already Rosenblatt Securities has projected that AAPL needs to hike the iPhone price by +43% to cover for the tariffs.
“Assuming” AAPL is able to pass on the tariffs levied (on China) onto consumers:
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A basic iPhone 16 model priced at $799, could cost as much as $1,142 thereafter.
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The preimim iPhone16 Pro Max, with a 6.9-inch display and 1 terabyte of storage, currently retails at $1599, could cost nearly $2300 thereafter
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Lastly, the entry level iPhone 16e, (launched in February 2025), along with its suite of AI features, that costs $599, will become $856 thereafter.
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Prices of other APPL devices will inflate as well. (see above)
It is next to impossible that AAPL will be able to in-source manufacturing to the US as Trump has foolishly hoped.
There is no way that US labour will be able to churn out in quality, quantity and low cost per unit, as cheap as China’s Foxconn. The manufacturing eco-system is far too sophisticated for any US assembly firm to match.
Amazon fell by -8.98%.
Yesterday’s fall marked its biggest one-day decline since 2022.
It comes after Trump also signed an executive order ending the de minimis trade loophole, that allow shipments worth less than $800 into US duty-free. The executive order will come into effect on 02 May 2025.
Investor confidence also waned amid fears of rising operational costs (due to tariffs).
Amazon cloud division faced increasing competition from Microsoft Azure and Google Cloud, further pressuring the stock.
Analysts also expect Amazon’s continued volatility on Friday with limited upside potential as investors remain cautious about the macroeconomic environment.
Meta Platforms fell by -8.96%.
On 3 Apr 2025, Meta's stock price fell amid a tax controversy in Korea, where it paid just 54 billion won in corporate taxes despite earning 10 trillion won locally.
It sparked criticism over profit-shifting to Ireland.
Secondly, the decline also followed leadership uncertainty in its AI division, with FAIR head Joelle Pineau announcing her departure on 30 May 2025.
This has raised concerns over Meta’s innovation continuity.
Nvidia fell by -7.81%
Nvidia, the artificial intelligence giant and retail investor favorite, sank more than -7.0%.
Trump has floated tariffs on semiconductors and other industries to be addressed separately from the +32% tariffs imposed on Taiwan.
A lack of clarity on how the Trump administration, intends to apply former President Biden’s so-called AI diffusion rules (to control chip exports) to be effected on 15 May 2025, adds to Nvidia’s woes.
Tesla fell by -5.47%.
Tesla’s epic fall could be distilled down to 3 items/event, that have effectively wiped out $100 billion in 3 months.
They are :
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His $20 million losing bet on the pro-Trump candidate for the Wisconsin Supreme Court.
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Tesla’s biggest sales drop ever, falling by -13% in its Q1 2025 EV delivery.
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Last but not least, the Politico report quoting MAGA insiders who said that Musk has overstayed his Washington welcome.
It did not help that Tesla’s longest backer Ross Gerber, CEO, Gerber Kawasaki Wealth Management has been calling for his step down for the past 2 years.
Just yesterday again he shared with the media that it does not matter whether Mr CEO steps down from DOGE or not.
What matters is Tesla needs to be Tesla and be fronted by someone:
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Who's in the middle.
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Who is a great communicator.
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Who refocuses people on what Tesla really does.
Ouch !
Question is do you think Mr CEO even bothers ?
GOOG fell by -3.92%.
Like its Mag 7 peers, Alphabet fell while holding onto :
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A normalized P/E ratio of 23.33.
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A price/sales of 6.28.
This reflects investor concerns over Alphabet’s reliance on advertising, that accounts for nearly 90% of revenue, amidst slowing growth in its cloud division.
With the possibility of a worsening domestic economy, this will have a direct impact on Alphabet & its stock price.
This is because advertisers tend to become more conservative during periods of economic crisis, says Sonata Insights, Chief analyst, Debra Aho Williamson.
Advertisers will look for opportunities to pull back on nonessential spending, and will be less willing to commit to experimental or unproven types of advertising.
Microsoft fell by -2.36%
On Thursday, Microsoft pulled back more than -2.0% after Bloomberg News reported that the IT giant was rolling back data center projects worldwide, suggesting that the company is wary of expanding its cloud computing infrastructure too rapidly.
“Affected” locations include:
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United Kingdom.
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Australia.
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Indonesia.
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US - North Dakota.
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US - Wisconsin.
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US- Illinois.
In February 2025, Microsoft has budgeted more than $80 billion on 2025’s capital expenditures, primarily for AI data centers.
With the intended pullback, it’s hard to know exactly how much of it is (a) due to diminished demand vs (b) temporary construction challenges, eg. shortages of power and building materials.
Should investor, this take this opportunity to load up OR get out, re-group and take a stab when prices have fallen further ?
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Do you think the Magnificent Sever will continue its fall on Fri, 04 Apr 2025 ?
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Do you think negative sentiments will persists until all tariffs’ anxiety have been dealt with ?
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