The six biggest tech companies lost around $270 billion in value over the past two days, as the broader market sank due to a global surge in Covid-19 cases and fears that Congress will not pass an additional stimulus package to help the ravaged U.S. economy before the year is out.
Amazon shed roughly $30 billion in market cap over the past two days, while Microsoft, which reported weak revenue guidance Tuesday, lost $70 billion. Apple, which hit a $2 trillion market cap in August, shed $70 billion in value, and Tesla dropped $13 billion.
Alphabet and Facebook also faced added pressure Wednesday as their chief executives defended their legal liability shield in Congress, alongside Twitter. Alphabet has shed $50 billion from its value and Facebook lost $40 billion during the last two days.
The concern comes as investors wonder how the current spike in Covid-19 cases will affect the global economy. U.S. cases have risen by a record daily average of 71,832 over the past week, according to data compiled by Johns Hopkins University. Cases are also up sharply in Europe, leading some countries to reinstate certain social distancing measures.
Even stay-at-home companies, whose stocks had seen a boost from the pandemic, weren't immune to the market slump. Shopify, which makes online tools for other companies to sell products online and this week announced a partnership with TikTok, lost more than $1 billion. Slack also dropped $630 million, while Spotify lost more than $1.6 billion.
However, some recent earnings reports from smaller tech companies could signal that investors are overly pessimistic. For instance, Pinterest shares rose more than 20% after hours on Wednesday after the company delivered an upside surprise in revenue, non-GAAP earnings, and user numbers. Snap offered investors a similar surprise last week.
Despite the week's declines so far, tech giants are still coming out as winners for the year. The six largest tech companies (Apple, Microsoft, Amazon, Alphabet, Facebook and Tesla) were worth about $5 trillion at the beginning of the year. After Wednesday's close, they were worth more than $7.1 trillion.
Four of the big six -- Alphabet, Amazon, Apple and Facebook-- are set to report earnings Thursday after the bell, alongside Twitter.