When the multi-trillion-dollar hyperscaler stocks fall, so do their downstream suppliers.
Amazon (AMZN), Microsoft (MSFT), Oracle (ORCL), and Meta Platforms (META) all dropped abruptly. Investors continued to take profits in them. They also rotated into safer, income-producing stocks that pay dividends.
Income stocks like Phillip Morris (PM), British American Tobacco (BTI), and Altria (MO) are some of the stocks benefiting from the sector rotation.
CoreWeave (CRWV) and Nebius (NBIS) lost 11.4% and15%, respectively, on July 24. Meta’s pivot as a “neocloud” provider, or AI server rental service, pressured those firms. Markets are pricing in their lack of a moat. Bears hold a 30% short float against NBIS stock, while CRWV stock attracted a 19% short float.
Intel (INTC) gave up its 15% post-earnings rally. It erased an eye-popping $90 billion in market capitalization. The drop should not concern long-time investors. INTC stock is up by 150% YTD. By comparison, shares of Advanced Micro Devices (AMD) rose after the firm signed a supply deal with Anthropic (ANTHRO). Broadcom (AVGO) and NVIDIA (NVDA) gained, while Micron Technology (MU) rose 8.5% last week.
Qualcomm (QCOM) continued its downtrend. Shares peaked at around $260 before settling at around $167.00. Investors did not rally around the chip firm supplying the Snapdragon chip for Samsung’s next-generation Galaxy smartphones. Smartphone sales face weak demand amid rising semiconductor prices.
