In two years, the steepest three-week decline in tech stocks ended, with Amazon and Intel leading the way.

• This week, the Nasdaq dropped 3.4%, resulting in an 8.8% decline over the past three weeks, which is the worst three-week stretch since 2022.
• The selloff highlights investor doubts about the accuracy of second-half forecasts.
• Some of the steepest declines have been observed in Amazon, Intel, Microsoft, and Nvidia.

Wall Street is nervous as second-quarter earnings from tech's mega-cap companies have mostly passed.

The Nasdaq experienced a 3.4% decline this week, resulting in an 8.8% three-week slide. This marks the worst performance for the tech-heavy index in that time frame since September 2022, when the market was affected by inflation and rising interest rates.

The tech industry has experienced a positive narrative since the end of 2022, with the economy recovering and anticipation building around the growth opportunities brought about by artificial intelligence. The Nasdaq experienced a 43% surge in 2022 and is currently up 12% in 2024, having reached a new record last month.

Despite the challenges faced by some companies during earnings season, the economy remains a major concern for the entire industry. The Labor Department reported on Friday that job growth in the U.S. slowed significantly in July, while unemployment increased and economic data showed an unexpected rise in unemployment benefit filings and a weakening of the manufacturing sector.

According to Josh Koren, founder of Musketeer Capital Partners, tech giants with valuations exceeding a trillion dollars are becoming increasingly significant macroeconomic players due to their immense size. On Thursday, both Amazon and Apple reported earnings, with Amazon falling short of revenue and issuing a dismal forecast, while Apple only achieved 5% growth in revenue.

"Koren stated on "Squawk Box Europe" on Friday that as the economy slows down, businesses like Amazon and Apple will also slow down, as seen in their earnings."

On Friday, Amazon's stock price dropped by 8.8%, resulting in a 14% decline over the past three weeks. During the earnings call, executives attributed some of the revenue shortfall to consumers purchasing cheaper household goods and fewer high-end products like computers and TVs.

"Amazon finance chief Brian Olsavsky stated on the call that the same consumer trends we have been discussing for the past year, such as consumers being cautious with their spending and trading down, are still prevalent. He added that there are indications that these trends will continue in Q3."

Although Apple's earnings and revenue exceeded expectations, the stock only slightly increased in value on Friday and for the week. This was after a significant decline of over 5% in the previous two weeks.

The software company's Azure cloud segment missed on growth, and analysts at Mizuho noted that Azure "core consumption was impacted by capacity constraints and softness in certain European geos."

The stock price of declined slightly this week after a 10% drop in the previous two weeks. In its recent earnings report, YouTube's advertising revenue fell short of expectations, while the company's overall ad growth of 11% was significantly lower than its rival, which experienced a 22% expansion.

Meta is the exception

The company's CEO, Mark Zuckerberg, announced that Meta's stock had risen almost 5% this week, following the company's successful beating of Wall Street estimates and the release of an optimistic forecast for the current quarter. He attributed this success to the company's heavy investments in AI, which he said are now paying off by creating more relevant ads and making it easier for marketers to create campaigns.

"Zuckerberg stated on the earnings call that the AI work being done by Facebook will improve the effectiveness of recommendations, help people find better content, and make advertising experiences more efficient. These products are already at scale, and there is significant potential for growth."

Even after the rally Meta is down over the past three weeks.

Nvidia, the largest winner in the AI boom, has not yet released its results and its stock has fallen 17% during the Nasdaq's three-week decline, despite being up over 110% for the year.

Nvidia's success in AI infrastructure relies on investments from its top tech peers. Any indication of potential decline in Nvidia's stock can have a significant impact due to its recent parabolic growth. The company will report its results on Aug. 28.

On the flipside of the semiconductor market is .

Recently, Intel, which was once the world's largest chipmaker, has been surpassed by competitors and is lagging behind in the AI race. On Friday, the stock experienced its worst day in 50 years, dropping 26% to a level not seen since 2013.

Intel reported a significant earnings miss and announced a major restructuring that involves cutting 15% of its workforce. CEO Pat Gelsinger stated on CNBC on Friday that it is the "most substantial restructuring of Intel since the memory microprocessor transition four decades ago." Despite this, investors are not optimistic about its success.

Analysts at KeyBanc Capital Markets reduced their estimates for the stock and kept their hold recommendation, stating a challenging path ahead.

"The major headcount reduction at INTC is likely to make it more challenging to achieve its targets due to the numerous challenges it faces," they wrote.

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