In the last three days, the US stock market experienced a significant shift as eight of the largest tech companies increased their market capitalization by $420 billion. This movement was triggered by decisions regarding the Google antitrust case and new successes in artificial intelligence.
Google at the Center of Attention
Judge Amit Mehta's decision in the Google antitrust case sent a positive ripple through the markets. Rather than breaking up the giant or imposing severe measures, the court merely required Google to share certain search data with its competitors. As a result, Alphabet's shares jumped 9% in a single day. Apple also benefited, as its strategic agreement with Google—to keep Alphabet’s search engine as the default on the iPhone—remains intact. This regulatory clarity lifted a 'dark cloud' over Big Tech, boosting investor confidence and stock prices.
Broadcom and AI Innovations
Beyond Google and Apple, Broadcom stood out as well. The semiconductor giant announced a $10 billion deal with a major client, which many analysts suspect is OpenAI. This announcement propelled Broadcom's shares by 13% in one week, adding billions to its already colossal capitalization. In one year, the stock surged by 120%, a rare pace in the stock market for a company of this size. The takeaway was clear: AI is no longer just a promise but a powerful force reshaping valuations across the tech sector.
Contrasts: Nvidia, Microsoft, and Tesla
While some gained billions, others like Nvidia and Microsoft logged losses. Nvidia lost 4% over the week, marking its fourth consecutive decline. Microsoft followed a similar trend, recording a fifth consecutive weekly loss despite solid fundamentals, as many investors appeared to cash in on profits after a stellar 2024. In contrast, Tesla surprised with a 5% rebound. The company's move to reinstate Elon Musk's massive compensation plan—potentially worth $1 trillion—sparked renewed enthusiasm in the market, particularly surrounding its ambitions in AI and automotive.
The recent surge of tech companies in the stock market illustrates how regulatory decisions and technological breakthroughs, especially in the field of artificial intelligence, can significantly impact market capitalization. Investors continue to pay close attention to these changes, and the future of Big Tech appears promising.
