Billion-dollar shake-up: Global tech firms shed over $600 bn m-cap in Q3

Adversely affected by high bond yields, AI market decline, and sluggish global economy, exacerbated by soaring oil prices

The top 25 global technology (tech) firms, including Apple, Microsoft, Amazon, Tencent, Samsung, Oracle, and Accenture, collectively lost over $600 billion in market capitalisation (m-cap) during the July-September quarter (third quarter, or Q3) of calendar year 2023 (CY23), reveals a recent report by GlobalData, a London-based analytics and consulting company.

According to the report, most of these top global tech stocks were negatively impacted by high bond yields, a decline in the artificial intelligence (AI)-driven market rally that began in June 2023, and sluggish global economic conditions. These conditions were further exacerbated by the surge in oil prices during the recently concluded quarter.

“Apple’s stock peaked during the quarter, hitting an m-cap of $3.07 trillion on July 31, 2023. But, the stock was dented by news of the Chinese government’s decision to expand the ban on Apple products to state-owned companies and government-sponsored entities,” said Gracio Benher, business fundamentals analyst at GlobalData.

Even though the Chinese government later denied issuing such a directive, the damage had already been done to Apple’s stock.

Towards the end of Q3, Benher noted that Apple’s shares were affected by projected soft demand for the iPhone 15 over the next 12 months, with the initial excitement waning. Nevertheless, investors still appear confident in the company’s long-term prospects, banking on its innovation capabilities.

In contrast, Alphabet and Meta Platforms were notable gainers, with market value gains of over $145 billion and $46 billion, respectively, in Q3CY23.

The rise in Alphabet’s share price was attributed to new opportunities presented by generative AI and the company's reputation as a credible contender to ChatGPT, as suggested by the report.

Top semiconductor stocks had a mixed quarter.

Companies such as ASML, Advanced Micro Devices, Inc, Texas Instruments, and Applied Materials, Inc experienced a decline in market value, while NVIDIA Corporation and Intel maintained their growth trajectory.

Among the top 25, NVIDIA added another $19 billion in m-cap in Q3, although its stock saw only a 1.86 per cent overall growth during the quarter. However, the chip company’s shares have surged by a remarkable 196 per cent since the beginning of 2023, according to the GlobalData report.

Looking ahead to the final quarter of CY23, Benher believes that the deflated tech stocks may receive a boost from Q3 earnings. These earnings are expected to benefit from strong consumer demand and a resilient US economy. However, Benher cautions that “volatile economic conditions, fuelled by rising oil prices and the Israel-Palestine conflict, could pull back a potential rally”.