The world's largest tech company has seen stock prices fall over the past month after years of sudden profits from artificial intelligence (AI) as a wider market turmoil hit the tech sector hard.
Since massive advances in AI exploded into the scene over two years ago, tech stocks have been in tears, driving much of the market's profits. But this success, coupled with the uncertainty surrounding President Trump's tariffs and questions about AI's future, has come back to bite the industry.
“Technology has become a victim of its own success,” said Callie Cox, chief market strategist at Ritholtz Wealth Management.
“That doesn't necessarily mean that the tech sector narrative has collapsed,” she continued. “That means it's difficult for the sector to continue to reach them because there are so high expectations for technology.”
A high-tech company known as the epic Seven has been assaulted in recent weeks. From the beginning of the year, these seven stocks have market valued at $1.57 trillion, according to Yahoo Finance.
Shares of Facebook and Instagram's parent company Meta have plummeted nearly 19% in the past month. Amazon's stock fell almost 16% over the same period, while Nvidia has fallen by about 14%.
Shares in Google's parent Alphabet have sunk nearly 13%, similar to Apple's shares, with Microsoft falling almost 8%.
Tesla is struggling with its biggest losses, with its share price plunging 32% over the past month. However, this appears to be driven in part by the role of Elon Musk, CEO of Elon Musk's role in the Trump administration.
Recent sales have added trillion dollars of market value since the second half of 2022, representing more than a third of the S&P 500.
“This has been the best performance factor in a mile in the last two years. Usually, when the stock market changes rapidly, these leadership sectors tend to be at their worst,” Cox told Hill.
The broader markets stumbled as Trump threatened, imposed and walked back various tariffs on his American trading partners. Last week, Trump enacted 25% tariffs in Canada and Mexico and 10% tariffs in China, building on the 10% import tax he imposed last month.
Trump later eased Canada and Mexico, and announced a temporary exemption from auto parts and goods subject to the North American trade agreement he negotiated in his first term.
These exemptions end on April 2nd. This will impose mutual tariffs on countries where Trump is obligated to US goods. A new 25% tariff on steel and aluminum imports also came into effect Wednesday.
Trump's tariff movement has led to its response to other countries. Canada announced a 25% tariff on US goods earlier this month, followed by a 25% tariff on US steel and aluminum, which was announced on Wednesday.
Ontario Premier Doug Ford also agreed to meet with Commerce Secretary Howard Lutnick on Thursday after threatening to impose additional electricity charges on three states: Michigan, New York and Minnesota.
Similarly, the European Union announced plans to collect tariffs on US goods worth $28 billion in mid-April.
“The constant and relentless flow of news coming out of the Trump White House has made many growth investors we talk about around the world.
Steve Sosnick, the chief strategist of interactive brokers, said emphasising that “the market dislikes uncertainty” caused confusion over the round-trip and potential impacts of tariffs.
“At best, there are times when tariffs are difficult at the market,” Sosnick told the hill. “And in reality it's like a spinning investor's mind because it's such an emotional goal. They change almost every day.”
The administration's focus on tariffs and aggressively cutting government spending is likely to have caught investors off guard, intimidating the president's focus on deregulation and tax cuts, Sosnick said.
Trump's tariffs are likely to be particularly heavy in the tech industry, where many manufacturers abroad are found, Cox said.
For example, Apple produces iPhones primarily in China, but is currently subject to 20% tariffs. iPhone makers, like Trump's first term, have yet to receive exemptions.
The future of AI development has also been questioned in recent weeks following the emergence of Chinese AI startup Deepseek.
Deepseek has acquired a new R1 model, comparable to Openai's latest model, claiming it would cost just $5.6 million to train.
“The concern for investors is that it's a bit ahead in itself, and Big Technology is currently under the microscope.
Google said it plans to spend $75 billion on capital spending this year amid the AI push, Meta said it would spend $65 billion, and Microsoft committed $80 billion.
The Trump administration jumped on this trend and launched the Stargate project on Openai, Oracle and SoftBank. The project is looking to invest $500 billion in AI infrastructure over the next four years.
“We can't minimize Deepseek's impact on the market,” says Sosnick.
“Deepseek came out in early January and slightly overturned that model,” he added. “It didn't completely overturn that, but it put the minds of investors wondering whether AI promises would require the approach we've been investing in.”
Thomas Hayes, chairman and managing member of Great Hill Capital, has denounced the Bank of Japan's interest rate hikes for some of the recent turmoil in the tech sector.
“Now, the central bank has raised its fees, so that's no longer free money,” Hayes said of the Bank of Japan. “So, if you have a loan and the interest rates are rising, you want to pay off that loan, right?”
“The way they pay off the loan is that they sold off stocks that they're all crowded. “It's a rewind.”
He also highlighted that there are often weaknesses in the market in February and in March of the year following the election due to policy uncertainty.
“There's no need for good policies in the market,” Hayes said. “The market needs known policies. Currently, every day for the past few weeks is new tweets and new policies and new volatility, so we don't know who is going on. Welcome to Trump 2.0, just like Trump 1.0.”
But he added, “The good news is that it tends to resolve, not down.”
