A group of seven megacap tech stocks – often referred to as the Magnificent 7 – has lost more than $2.6 trillion in value over the last 20 days, making for an average of $125 billion per day over the period. In total, these stocks lost “triple the value of Brazil’s entire stock market.”

That’s according to the economics outlet Kobeissi Letter, which noted on the microblogging platform X (formerly known as Twitter) that the Magnificent 7 lot “as much value as Nvidia’s entire current market cap in 20 days,” with Nvidia itself losing $1 trillion since its high.

Source:Kobeissi Letter on X

The group, which comprises Nvidia, Microsoft, Amazon, Apple, Alphabet, Meta, and Tesla, has been enduring a significant correction, with the last 20 days seen Nvidia lost 23% of its value, or around $800 billion, while Tesla dropped 19% to lost $164 billion.

Microsoft, Apple, Amazon, Alphabet, and Meta all saw losses between 9% and 15% to lose between $257 billion and $554 billion in market capitalization, erasing a total of $200 billion more “than every tock in Germany’s stock market combined.”

The tech titans, which have outperformed the broader S&P 500 since the market trough of 2022, are now facing a reckoning as investors are increasingly wary about the sustainability of their meteoric rise, with Nvidia for example surging 110% year-to-date, and more than 2,300% in the last five years.

The earnings reports of these companies, beginning with Microsoft and culminating with Nvidia in late August, will be closely scrutinized for signs of weakness. Their performance could set the tone for broader market sentiment, with implications for everything from cryptocurrency to other high-risk assets.

Their poor performance comes after a prominent macroeconomist, Henrik Zeberg, reiterated his prediction of a looming recession that will be preceded by a final surge in key market sectors, but can potentially be the worst the market has seen since 1929, the worst bear market I Wall Street’s history.

Notably the Hindenburg Omen, a technical indicator designed to identify potential stock market crashes, has started flashing just one month after its previous signal, raising concerns that a stock market downturn could be coming.

The indicator compares the percentage of stock reaching new 52-week highs and lows to a specific threshold. When the number of stocks hitting both extremes surpasses a certain level, the indicator is said to be triggered, suggesting an increased risk of a crash.

Featured image via Unsplash.