Stocks tried to claw back some gains on Wednesday, but the morning's rally fizzled as Nvidia and other megacap technology stocks sold off in the afternoon. Nvidia shares ended the day down 5.1%, while Tesla tumbled 4.4%. Meta Platforms shed about 1.1%, while Microsoft slipped 0.3%. All told, the tech-heavy Nasdaq Composite closed down 1.1% at 16,195.81. The Dow Jones Industrial Average and the S & P 500 also ended the day lower.
However, when adjusting for future earnings-per-share growth, the stocks trade at a 40% discount. "As a result, we'd conclude that while Mag 7 valuations still face significant downside valuation risk in a black swan or recession scenario, current Mag 7 valuations relative to future growth prospects are attractive after the recent drawdown," he wrote. As of Wednesday's close, the group is down about 8.