As of March 12, 2025, the Nasdaq Composite has entered a correction, down approximately 9% year to date and 13% from its peak in December 2024. This decline reflects the broader struggles of major tech stocks, notably the “Magnificent Seven,” which includes Apple, Microsoft, Nvidia, Amazon, Meta Platforms, Alphabet, and Tesla, all of which are experiencing downward Trends, with the exception of Meta.
- Nasdaq Composite down 9% year to date.
- Magnificent Seven stocks mostly declining this year.
- Buying the dip seen as a potential strategy.
- Tesla facing increased international competition.
- Tesla's valuation remains extremely high.
- Other Magnificent Seven stocks show growth potential.
The Nasdaq Composite index, which tracks a wide range of stocks on the Nasdaq exchange, has shown a significant downturn since its peak on December 16, 2024. This drop has coincided with a challenging environment for technology companies, particularly those in the “Magnificent Seven.” These stocks have generally followed the index’s downward trajectory, with notable declines observed in Apple, Microsoft, Nvidia, Amazon, Alphabet, and Tesla, while Meta has remained relatively stable.
Key statistics regarding the “Magnificent Seven” include:
- Apple: Down year to date, but maintains strong profitability.
- Microsoft: Essential in enterprise tech, with a partnership with OpenAI.
- Nvidia: Critical for AI infrastructure development.
- Amazon: Leading in cloud computing and expanding its advertising business.
- Meta: Investing heavily in AI and digital advertising.
- Alphabet: Dominates search and digital video content through YouTube.
In contrast, Tesla’s performance has been troubling, particularly in international markets where sales have declined. The company faces stiff competition from international EV manufacturers like BYD and Volkswagen, which offer lower-priced alternatives. Tesla’s automotive revenue fell to $19.8 billion in the fourth quarter of 2024, down 8% year over year, raising concerns about its future growth potential.
Despite a 42% drop in Tesla’s stock price this year, it remains one of the most expensive stocks among the “Magnificent Seven,” making it challenging for investors to justify its valuation. While investing in Tesla involves a vision for the future, the current market conditions and competition necessitate caution.
In summary, the Nasdaq Composite’s correction highlights the volatility in the tech sector, particularly among the “Magnificent Seven.” While opportunities may exist for investors to buy on the dip, Tesla’s current challenges and high valuation warrant careful consideration.
