At the opening today, the "Mag Seven" once suffered a heavy blow across the board, breaking the industry's rebound that had lasted for several months.
Looking at the opening situation, all three major stock indices opened lower collectively, with the Dow Jones falling by 2.56%, the S&P 500 by 3.07%, and the Nasdaq by 3.68%.
In terms of the largest decline, Apple's opening was close to -9.6%, Microsoft's was -4.8%, both Google and Amazon exceeded 5%, and Nvidia once fell to 14%. In terms of market value, the total market value of the 'Mag Seven' once evaporated by $1.29 trillion at the opening, which made the market shudder.

Although the stock prices of these companies have basically rebounded strongly now, looking at the pre-market reaction of these companies' stocks to the potential economic recession in the United States and Berkshire Hathaway's sale of Apple, there are also hidden dangers behind these high-priced stocks.
Deutsche Bank strategist Jim Reid said that the market was in a tense state before Friday, and the weak employment data did indeed intensify the significant fluctuations worldwide, "From today on, the most important thing is to stay alert."
Looking at the operating conditions of U.S. technology companies, this mainly comes from their increased investment in AI.
For example, Alphabet's latest disclosed Q2 2024 financial report shows that the company's capital expenditure for purchasing technology infrastructure in this quarter reached $13.2 billion, and the investment purpose is to support business growth, especially for AI products and services. This expenditure is expected to be higher than in 2023. It is expected that the company's capital expenditure will not be less than $12 billion per quarter this year.
Meta's latest financial report also predicts that the company's AI strategy will require increased investment in infrastructure and personnel. The cash used for purchasing servers, data centers, network infrastructure, and other properties and equipment in the first half of this year reached $14.57 billion, and it is expected that the capital expenditure in 2024 will reach between $37 billion and $40 billion, and the capital expenditure will also increase significantly in 2025.
Microsoft's latest quarterly capital expenditure, including financing leases, reached $19 billion, with cloud and AI-related expenditures accounting for the vast majority of it, with nearly half of it used for investing in infrastructure, but the company also plans to continue to increase capital expenditure.
Apple CEO Tim Cook said on the earnings call that as time goes on, the company has increased R&D efforts, Apple has been investing in AI and machine learning, and in terms of capital expenditure, it can be expected that investment will increase year by year. Amazon's CFO Brian Olsavsky said that Amazon's capital expenditure in the first half of the year was $30.5 billion, and the capital investment in the second half of this year will be even higher, most of which is used to cope with the demand for the growth of Amazon's cloud AWS infrastructure.
Has AI Investment Already Created A "Bubble"?
In the short term, a large amount of capital expenditure has affected the financial data performance of some technology companies, and these U.S. technology giants have also emphasized to the outside world the lag in obtaining returns and the necessity of increasing investment in the AI field. At present, generative AI applications are still in the early stage, and many cloud giants invest more in data centers, purchasing servers, and other infrastructure for large model training and cloud inference. Reporters have learned from several server industry insiders that this year, the sales growth of the server field is obvious for AI servers used in data centers, and the most obvious increase in procurement volume is overseas technology giants.
However, investors and institutions are obviously more concerned about when to get returns after capital expenditure. And this "lag" in returns means greater uncertainty and greater risk in the eyes of the market.
Hedge fund Elliott Management recently told investors that they believe large technology companies, especially Nvidia, are in a "bubble." The fund doubts whether large technology companies will continue to buy Nvidia's GPUs on a large scale, and AI is overhyped, many applications are not ready for AI, many assumed uses of AI will never be cost-effective, will not play a real role, and will consume too much energy.
Goldman Sachs analyst Jim Covello recently said that companies spending tens of billions of dollars in the AI field will not set off the next economic revolution. Most of the historical technological transformations have replaced expensive solutions with cheap solutions, replacing low-paid work with costly technology (AI), which is completely the opposite of the technological transformations he has witnessed before. Costs must be greatly reduced to make it affordable for the public to use AI to perform tasks.
"If you're going to invest now and get returns in 10 to 15 years, that's a venture investment, that's not a public company investment. For public companies, we expect to get a return on investment in much shorter time frames. So that's causing discomfort because we're not seeing the types of applications and revenue from applications that we would need to justify anywhere near these investments right now." D.A. Davidson analyst Gil Luria said recently.