Big US tech names lost hundreds of billions of dollars in market capitalization in August

Some of the world's largest companies lost hundreds of billions of dollars in stock market value in August, as U.S. stocks headed for their weakest month this year, Business Insider writes.

Apple, Microsoft, Tesla and Meta (formerly Facebook) had a combined decline in market value of $625 billion between the start of August and the end of last week, according to Insider's calculations. Apple had lost $314 billion, followed by Tesla with a drop of $117 billion, Microsoft with $114 billion and Meta with $80 billion.

The decline is in contrast to the performance of US stocks as a whole this year, particularly those in Big Tech, thanks to investor enthusiasm for artificial intelligence. Even with August's decline, from the start of 2023 through the end of last week, the S&P 500 was up 14%.

To some extent, the decline can be attributed to seasonal trends. Historically, for the past three decades, August has been the second worst month of the year for stocks, an aspect that was accentuated in the year before the presidential elections. Higher interest rates and rising bond yields have also weighed on equities, reducing the relative attractiveness of this asset class. High borrowing costs erode companies' profitability, making their shares less attractive, while higher bond yields give investors the option of higher returns with less risk.

Treasury yields have risen in recent quarters as the Federal Reserve has aggressively raised interest rates to curb inflation.

Last but not least, there have been one-off factors that have influenced Big Tech stock prices in recent months.

Apple had lackluster financial reports that showed iPhone and iPad sales were down due to lower spending by consumers in the United States. In Tesla's case, investors are increasingly worried that this year's price cuts will hurt the automaker's margins.

If Microsoft, Tesla, Apple and Meta have recently seen their stock valuations severely eroded, Nvidia has defied the trend of the big names in technology. The maker of graphics processors used in artificial intelligence applications had a great year, with second-quarter results showing a 101% year-over-year increase in revenue, according to Business Insider.