After a vicious multiday selloff in the tech sector, equities are trying to stabilize here. Gold, silver, Bitcoin, and crude oil are all dropping, though. Treasuries and the dollar are rallying.
What goes up sometimes comes down...violently. That was the case with some of the highest of high-flying technology and chip stocks yesterday. The Nasdaq Composite Index shed 2.2%, but the Global X Artificial Intelligence & Technology ETF (AIQ) dropped 5.5%, while the iShares Semiconductor ETF (SOXX) tanked 7.8%.
Several leading chip names dropped by double digits, too. Then this morning, recent red-hot Initial Public Offering (IPO), Cerebras Systems Inc. (CBRS), slid as much as 14% after the company forecast underwhelming gross margins for the second quarter. Its shares surged 68% on the day it came public in mid-May.
Source: Yahoo Finance
All told, the Magnificent Seven stocks have bled $2.7 trillion in market capitalization this month. But that isn’t stopping leading global tech companies from hitting up the debt and equity markets for more cash.
South Korean chipmaker SK Hynix Inc. said it will sell up to $29.4 billion in American Depository Receipts (ADRs) as part of a US listing. If it succeeds in listing those ADRs in July, it would use the money to boost production capacity. For its part, SpaceX (SPCX) just sold $25 billion in bonds to raise capital for AI spending. The move comes on the heels of its record-setting IPO, which raised $75 billion in the equity market.
One last Big Tech footnote: Alphabet Inc. (GOOGL) will be added to the Dow Jones Industrial Average on June 29. Verizon Communications Inc. (VZ) is getting the boot to make room for GOOGL in the 30-stock index.
