The biggest market cap loss in US history 🤯

Last week in a nutshell

Nvidia has recently made headlines for all the wrong reasons, losing a staggering $279 billion in market value on Tuesday. The company’s shares took a sharp nosedive, falling by 9.5% in a single day.

This marks the most significant single-day loss ever seen by a US stock, leaving investors and market watchers asking: What went wrong?

What caused Nvidia’s massive loss?

Nvidia’s latest earnings report didn’t meet the sky-high expectations set by investors. Despite all the hype, the results fell short of predictions, leading to a significant sell-off. 

Growing scepticism about AI

There’s increasing scepticism around the pace at which artificial intelligence (AI) will revolutionise the economy.

Significant players like JP Morgan Asset Management and BlackRock Investment Institute are beginning to question whether AI’s impact will be felt as quickly as initially thought. 

Legal troubles in paradise

Adding to Nvidia’s woes, the U.S. Justice Department has issued subpoenas to Nvidia and other tech companies as part of an antitrust investigation. This legal scrutiny has only deepened investor concerns, casting a shadow over the company’s prospects.

Everyone feels the GPU heat

The tech sector is navigating choppy waters, with the Philadelphia Semiconductor Index experiencing its worst drop since March 2020. Market conditions are rocky, with rising inflation and concerns over an economic slowdown in China adding to the pressure.

Who else was affected by this?

Tech giants like Alphabet, Microsoft, and Apple also saw their shares drop by at least 1.9% as enthusiasm for AI cooled off. The semiconductor sector is under stress, with significant players like Intel, Applied Materials, and TSMC also seeing their stocks slide.

The impact of Nvidia’s downturn extended beyond U.S. borders. In Asian markets, Japan’s chip gear firms Tokyo Electron and Advantest were down around 7% by late Wednesday morning. South Korean chipmaker Skynet experienced similar declines, dragging benchmark indices lower across the region.

SEBI’s toxic work culture & allegations against chairperson

SEBI’s chairperson Madhabi Buch is facing multiple accusations. 

First she was accused of being involved with the Adani Group as per Hindenburg. After that Congress accused her of receiving payments from her former employer, ICICI Bank, even while she was with SEBI. 

Furthermore, SEBI employees filed a written complaint to the finance ministry about a “toxic work culture”, demanding her resignation.

Rapido became India's latest unicorn

Rapido has officially entered the unicorn club after raising $200 million in its series E funding round. The new round, led by WestBridge Capital, valued the company at $1.1 billion. 

Week in a number

27000

India's tech sector witnessed over 27,000 employees losing their jobs. So far this year, the industry has seen over 136,000 tech professionals laid off across 422 companies.

The Markets in a Minute

Finance icebreakers

Grey Market Premium is the difference between the expected IPO price and the price at which the shares are traded in the grey market. If demand is high, the premium might be significant, reflecting investor speculation and sentiment.

Suppose a company is about to launch an IPO and the shares are priced at ₹100 each. In the grey market, the shares might be traded at ₹120 due to high demand.

Investors are speculating that the official listing price will be higher, and they aim to profit from this difference.

However, there is no official guarantee that the shares will perform as expected once they are listed on the exchange.

answered by

Smriti Tomar

Co-founder at Stack Wealth

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Thank you for reading all the way. See you next week! - Stack Wealth team