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Why Nvidia, Amazon and Apple shares fell on Friday

What happened

Shares of some of the world’s biggest technology companies languished on Friday after several days of positive gains for the market. Semiconductor specialist Nvidia (NVDA -4.45%) was down 5.5%, according to the iPhone maker Apple (AAPL -3.86%) was down 4.5%, and the kingpin of e-commerce Amazon (AMZN -2.52%) slipped up to 3.5%.

While each of the stocks rallied slightly, at 2:44 p.m. ET the shares were down 4%, 3.6% and 2.2%, respectively.

Fresh warnings about the possibility of a recession dragged a wide range of stocks down today, but there was also company-specific news for each of the tech pillars.

Image source: Getty Images.

So what

You’re here CEO Elon Musk has joined the chorus of business leaders sounding the alarm over the economy and the possibility of a recession. In an email to staff, Musk admitted to having a “super bad feeling” about the economy, which led to the decision to cut 10% of staff at the electric vehicle (EV) maker, according to a report by Reuters.

This followed a similar warning issued by the voice JPMorgan Chase CEO Jamie Dimon, who told a recent conference that the company was bracing for an economic “hurricane” this year, fueled by soaring inflation and the war in Ukraine.

Those statements weighed on Wall Street on Friday, sending the Nasdaq Compound and the S&P500 down 2.3% and 1.4%, respectively (at the time of writing). Still, there were company-specific issues that helped fuel falling stock prices for the tech triad.

Morgan Stanley Analyst Katy Huberty reviewed the latest data provided by Sensor Tower and concluded that Apple’s App Store sales growth slowed last month, with revenue growth slowing to 4% year over year. another, against growth estimated at 8% in April. Huberty said the slowdown was broad based across most regions except for the US market. Evercore Analyst Amit Daryanani had similar concerns, noting that the slowdown was “somewhat surprising” given expectations of accelerating growth.

Amazon announced that its Worldwide Consumer CEO, Dave Clark, is leaving the company “to pursue other opportunities.” Clark has been with Amazon for 23 years; he joined the company just a day after completing his MBA program. In an email to his team, Clark said it was time to “begin a new journey.” He admitted he had been planning the move for some time, sharing his decision with family and friends, but was waiting for the right time.

CEO Andy Jassy has yet to name a successor, but will likely make an announcement in the coming weeks.

Finally, if reports are to be believed, users may have to wait a bit longer for Nvidia’s next-gen ray-tracing chips. The RTX 40 series is rumored to be in the testing phase and is expected to be released as early as September. However, the latest scuttlebut suggests that development is still ongoing, with many stages remaining before the semiconductors can begin the manufacturing process.

If the latest rumors are true, it will be at least late 2022 before chips hit store shelves, if not later.

Now what

It is important to put all this news in context. Although the warning of a recession may increase, it will still take at least a month before it is certain. It takes of them successive quarters of declining gross domestic product (GDP) to signal the onset of a recession. US GDP fell 1.4% in the first quarter, so it remains to be seen whether the economy is indeed at the start of a recession. If this turns out to be the case, it is important to remember that this is all part of the normal economic cycle.

Moreover, each of these company-specific developments are part of regular business operations and are decidedly short-lived. App Store sales will no doubt change from month to month, company executives come and go, and research and development cycles vary depending on the product.

That said, there’s a reason why Amazon is the undisputed leader in e-commerce and cloud computing, Apple makes more money on smartphones than any other company, and Nvidia is the leader in graphics processing units for games. and data centers.

With growing fears of a recession, there is no doubt that some shareholders are taking profits after the recent surge. This should make no difference to savvy investors with a long time horizon.

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