Contributing to the stock market slump of big tech last Monday, according to some, were statements made by US President Donald Trump last week in which he ventilated the possibility of a ‘transition phase’ in the US economy. They were interpreted as a recession warning. ‘This is the first time an administration has said outright that the targets will cause pain,’ says Shelby McFaddin, analyst at Motley Fool Asset Management. Trump, by refusing to rule out a recession in 2025, thus provoked a new wave of declines in US equities.
Well, on Monday Tesla on Wall Street lost 13.23% of its shares. And the company’s market capitalisation fell 45% from the all-time high reached on 17 December, $1.5 trillion. This week’s drop is therefore the biggest intraday drop since January 2023. Had the stock closed near the session low of $225.59, it would have been the company’s biggest one-day drop since September 2020.
The drop is said to be due to sales, which fell in China, the US and Europe, but also to Elon Musk‘s political involvement. Indeed, some investors fear that his new role as head of the Department of Government Efficiency is a distraction for the billionaire. It was Musk himself who stated this. Then there would have to be added the lawsuits and federal investigations that Tesla has had to face over the accidents, in some cases fatal, linked to the Autopilot and Full Self-Driving assistance systems. Finally, Donald Trump’s threats of tariffs on products from Canada and Mexico.
A few days ago, there was also the collapse of Nvidia, the manufacturer of chips used for the development of artificial intelligence, which had opened last financial week with a 5% drop, then plummeted by almost 10% and finally closed with a drop of 8.69%, around 114 dollars, at the end of the session on the Nasdaq list. Since the beginning of the year, the stock has lost 15.8%, taking the company out of the restricted ‘club’ of the three trillion (in capitalisation), where only Apple (currently worth 3.56 trillion dollars on the stock exchange) now resists.
It was another black Monday on 10 March 2025, during which all the big tech companies suffered a combined loss of more than $750 billion in market capitalisation, marking the worst Nasdaq session since 2022: -2.8% the Dow Jones, -2.7% the S&P 500, -4% the NASDAQ.
- Tesla: -7.5 per cent (lost more than 15 per cent during the day, $100 billion burned in two months)
- Microsoft: -3,5%
- Apple, Alphabet, Amazon, Meta, NVIDIA: -5%
Trump’s tariffs have also clouded AI trading: Nvidia, again, was among the worst performers (with the huge uncertainty over new regulations for microchip exports), dropping 24% in the last month and more than 12% in the last five days. A company that has gained +1,832.91% in five years.
Additional concauses include the emergence of Chinese startups in the artificial intelligence sector, such as DeepSeek, which at launch had raised questions about the competitiveness of U.S. tech companies.
In spite of these fluctuations, some analysts remain optimistic about the long-term potential of big tech, citing its solid foundation and ability to innovate in the field of artificial intelligence. But the doubt that the bubble is about to burst is beginning to hover.
Indeed, how can we not forget the stock market deflation last summer, probably due to the devaluation of the yen. We talked about it in this in-depth article.
“You have to wonder what the market’s response will be in a week, or even a month,” says Matt Stucky, chief portfolio manager of equities at Northwestern Mutual Wealth Management. “The market is not exactly cheap.”
And for months, investors have been concerned that high bond valuations could weigh on long-term yields.
JPMorgan Chase CEO Jamie Dimon warned in January that economic headwinds could make it difficult for companies to justify their high stock prices. ‘Asset prices are a bit inflated,‘ Dimon told CNBC at the World Economic Forum in Davos, Switzerland. “I’m talking about the US stock market. But that’s not the case for stock markets around the world.”
As a matter of fact, some business leaders reduced their shareholdings in the US. Warren Buffett‘s Berkshire Hathaway plans to increase its holdings of Japanese stocks after amassing a record $321.4 billion in cash and Treasury bonds. Mark Zuckerberg has sold more than $500 million worth of Meta shares this year, according to data from S&P Global Market Intelligence. And both Zuckerberg and Jeff Bezos unloaded billions of dollars worth of stock in their companies in 2024.
The recent wave of declines in the technology sector is raising questions about the sustainability of the growth of big tech and the possible end of an era of unbridled expansion. The market may be facing a significant correction. Whether this is a passing phase or the beginning of a structural downsizing remains to be seen, but investor nervousness is now palpable.(photo by D Z on Unsplash)
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