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in mid-2024, the u.s. technology stock market experienced unprecedented turbulence.

at the end of july, u.s. media reported that the market value of the “seven big tech companies” (alphabet, apple, tesla, microsoft, amazon, meta, and nvidia) in the u.s. stock market had evaporated by a total of $1.52 trillion in the past three weeks, setting the largest drop on record.

on august 2, the u.s. stock market fell for two consecutive days. the three major u.s. stock indexes opened lower collectively. technology stocks, especially chip stocks, fell particularly badly. intel fell 26% at the opening on the 2nd. just half a month later, on august 15, the three major u.s. stock indexes closed higher, led by technology stocks, and tesla rose by more than 6%.

the volatility of us technology stocks not only reflects investors' concerns about the current market environment, but also seems to indicate many challenges inherent in the industry. although the stock market is still in a stalemate, the news that investment tycoons including buffett and soros have frequently reduced their holdings in technology stocks has still made the topic of whether the us technology bubble will burst very popular.

why did technology stocks plummet?

the decline in technology stocks in early august was the result of the combined effect of multiple factors.

first, the performance of technology companies themselves was not as good as expected. many large technology companies, including google, amazon, apple and microsoft, released quarterly financial reports that were lower than market expectations.

although these companies are still growing in revenue, the slowdown in profit growth has become the focus of market attention. in particular, google's parent company alphabet's advertising revenue growth has stagnated, especially under the current dual pressure of greater economic uncertainty and advertising spending cuts.

tesla's performance in 2024 was also far below market expectations, with its global sales growth slowing, especially in key markets such as china and europe, where its market share was gradually eroded by local competitors. in addition, tesla's electric vehicles face regulatory challenges in some markets, especially issues related to battery safety. the combination of these factors has led to a decline in investor confidence in it.

apple is facing similar problems, with its market share in the smartphone sector gradually shrinking. although the company has maintained growth in apple wearable devices and related services, this is not enough to offset the negative impact of slowing apple phone sales.

in addition to company-level reasons, macroeconomic factors also have an impact. in 2024, the federal reserve continued to raise interest rates in response to high inflation, resulting in rising capital costs, which had a particularly negative impact on technology companies that rely on financing for large-scale research and development and business expansion. in a high-interest rate environment, investors are more inclined to shift funds to low-risk, high-return assets. technology stocks, as high-risk, high-volatility assets, are not favored in this environment.

in addition, global supply chain disruptions and geopolitical tensions have further exacerbated market panic. the shortage of semiconductor supply chains has not been completely resolved, which has a direct impact on technology companies that have a strong demand for chips.

at the same time, the intensified competition between the united states and other countries in the field of science and technology, especially in the field of semiconductors and artificial intelligence technology, has made the market full of concerns about the future technology trade environment. the combination of these macro factors has led to a further decline in investors' confidence in technology stocks, resulting in a large-scale sell-off in the market.

after a sharp drop in u.s. technology stocks, the market quickly showed signs of recovery, thanks to the federal reserve's policy adjustments and the recovery of market sentiment.

according to us media reports, several fed officials suggested a rate cut at the meeting on august 21. the fed chairman also gave a speech at the "global central bank annual meeting" on august 23, hinting at another rate cut in september. it is reported that the next fed meeting is scheduled for september 17-18. based on the us employment and inflation data in july, officials are more likely to discuss the extent of the rate cut rather than whether to cut the rate.

can the ai ​​craze support the boom in technology stocks?

"the federal reserve is very likely to cut interest rates" has injected a "booster" into the market. especially in the context of an improved interest rate environment, investors will undoubtedly regain confidence in high-growth technology stocks.

in addition, the market remains optimistic about the potential of emerging technologies such as ai, which is also one of the important factors driving the rebound of technology stocks. although the cost of technology research and development is high in the short term, the prospect of ai's wide application in automation, data analysis, medical care and other fields in the future makes investors still look forward to the long-term growth potential of technology companies.

the continued investment in ai by companies such as microsoft and nvidia has further consolidated their leading position in the market and alleviated investors' concerns to a certain extent. these technology giants have taken active measures in response to market shocks.

apple and google have enhanced investor confidence through large-scale stock repurchases and dividend increases. in particular, apple's continued innovation and stable cash flow have made investors optimistic about its future development. at the same time, google's expansion in cloud computing and ai has also provided new growth momentum for the company's development.

however, well-known investors such as buffett chose to significantly reduce their holdings in technology stocks during the market rebound, a move that once again made market sentiment cautious.

buffett not only cut his positions in the "seven big tech companies", but also significantly reduced his holdings in apple. this series of operations is seen as his warning that the market is overly optimistic and is intended to remind investors to stay calm during the rebound. this is not only a question about the high valuation of technology stocks, but also shows their concerns about the future economic environment, especially the more severe macroeconomic background that may appear in the future.

whether it is pressure from performance or uncertainty at the macroeconomic level, even if the "tech bubble theory" remains popular, some experts still have confidence in tech stocks. jeremy siegel, professor emeritus of finance at the wharton school of the university of pennsylvania, said in an interview with the media that tech stocks have strong momentum and good profits, and their valuations are far from as outrageous as they were 20 to 25 years ago, and are still far from the internet bubble.

how does the domestic industry view the "technology bubble theory" or the "ai bubble theory"?

recently, at lenovo group's q1 financial report performance briefing, lenovo group chairman and ceo yang yuanqing talked about the "ai bubble theory" and said: "ai is by no means a bubble. ai will definitely penetrate deeper and deeper into everyone's life, work and efficiency improvement."

"the so-called 'bubble' means that (we) are all stuck on big models and generative ai. and it is mainly based on big models of language." yang yuanqing said that to realize ai, we don't need to crowd together on a single-plank bridge. there is more than one way to ai, there are many paths.

yang yuanqing believes that in addition to language models, there are many other data-based intelligence requirements in the real world. he believes: "public artificial intelligence alone is not enough. the future must be a hybrid artificial intelligence consisting of public artificial intelligence and personal artificial intelligence. this is a general direction."