While the streaming giant Netflix is crowned among the big technology companies, with the worst drop in its share price, Apple, the iconic iPhone manufacturer, takes the worst part of the story, as it has erased 688,792 million dollars in its market capitalization this year.
Earnings for big tech companies continue to slow on the NASDAQ and the outlook looks cloudy amid high inflation and fears of an economic downturn.
Seven of the so-called Big Tech have lost a total of 3.3 billion dollars so far in 2022, more than 2.5 times the Gross Domestic Product of Mexico, which was 1.322 billion dollars in 2021.
After big tech stocks including Tesla enjoyed strong gains until last year, especially during the pandemic, they are now suffering from sharp market corrections.
Netflix’s share has plummeted 70.19%, which has meant a loss of 187,669.5 million dollars in its market value, the smallest within the basket of stations in which Amazon.com, Alphabet (Google’s parent company) is located. , Microsoft, Meta Platforms (formerly Facebook), and Tesla.
While Meta seeks to make the metaverse a reality, its shares have depreciated 52.23%, thus sacrificing 500,792.7 million pesos of ‘market cap’. Shares of the e-commerce giant Amazon, meanwhile, have vanished 35.58%, which has discounted 598.271 million dollars in its market capitalization.
Below these issuers are Tesla (-33.95%), Microsoft (-23.40%), Apple (-22.39) and Alphabet (-22.29%).
Apple, although it is the second company with the smallest drop in its share price, its market capitalization has fallen to 2.2 billion dollars from 2.9 billion with which it began January. Even, it also moved away from the floor of the 3 billion dollars that it achieved on January 3 of this year.
Microsoft has been the second issuer with the greatest reduction in its market value. With a ‘market cap’ of 1.9 billion dollars, it has eliminated 606,861 million dollars this year. Meanwhile, Tesla and Alphabet have lost 338,162 and 443,181 million dollars, respectively, since the start of this year.
This Wednesday was another day of stock market losses for these stations. Amazon fell 5.14%, ; Netflix 5.04%; Target 5.20%; Tesla 5%; Alphabet 3.47%, Microsoft 3.17% and Apple 2.98 percent.
overpriced
Antonio Salazar, an analyst at Lia-Marco-Research, an independent market research house, explained that inflationary environments are particularly unfavorable for growth stocks, as technology companies are usually classified, because with the increase in the rate of interest find it hard to justify high valuations.
“In this scenario that we are experiencing, of high inflation and tightening of the central banks’ monetary policy, investors are not buying this type of stock,” he commented. “In the medium and long term they will generate a buying opportunity, but they are large companies that are overvalued,” he added.
Even the representative index of technology stocks, NASDAQ, remains in bearish territory. So far in 2022 it has fallen 28.53% and 31.03% since its last high in January.
The Lia-Marco-Research analyst considered that fundamentally most Big Tech companies are solid. He said that Amazon and Apple are attractive; In the case of Facebook with digital advertising and TikTok gaining market, it looks challenging.
Microsoft survived the dot-com crisis and is now one of the big companies. Tesla its “action always moves at the touch of a ‘tweet’” and its valuation is excessive and its profits were from loans and not so much from car sales. While Netflix is no longer considered within the Faang, in its case Nvidia is preferred.
Jacobo Rodríguez, Director of Analysis at Black Wallstreet Capital explained that at these levels “you can begin to see the big technology companies because their falls are significant, like Facebook, which has dropped 50 percent.”
He commented that the depth of the falls is due, in part, to the fact that stocks were very expensive, but some are already getting cheaper. He stressed that the ability of issuers to generate profits and cash flow, which is the most important aspect of companies, must be taken into account.