Why are Technology Stocks Down Today
Several tech companies announced financial results this week, with all eyes on investor reactions, as recent disappointments from tech big names like Alphabet, Microsoft, Meta, and Amazon have increased investor attention on the project.
While tech companies are sinking this week, Wall Street analysts are warning that it could be bad news for the economy as a whole as results from the recession show that inflation is rising and the impact is putting households & businesses beyond their expectations for rising interest rates in Paid.
Why tech stocks are falling wall Street analysts say several things are cutting into markets’ turmoil: a 40-year recession, falling interest rates, and a strong U.S. dollar – hurting companies in many countries because when their people earn less, they boost sales in other countries there are dollars.
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The Federal Reserve last raised interest rates by 75 basis points in September, meaning consumers will pay higher interest for car financing and other loans. Analysts say the sharp fall in interest rates has investors wondering whether low-interest stocks can continue to perform well in a high-yield environment. The proliferation of uncertainty and question marks is one reason why investors are not taking more risk in technology companies that do not perform well due to high-interest rates and high cost of debt.
Such a move could worry Wall Street, as investors fear that higher interest rates will make borrowing more expensive for businesses and households, which could hinder and contribute to economic growth that could trigger inflation tech companies are also struggling to boost sales as digital advertising and other revenue slow.
“All of these businesses depend in part on advertising revenue,” said Emily Bower sock Hill, managing director at investment firm Bower sock Capital Partners. “The fact that those revenues are going down is a real sign of weakness in the economy,” added Bower sock Hill, who also chairs the Kansas Public Employees Retirement Association’s financial committee on pensions over $20 billion Microsoft, down 1.59% at Thursday’s close, posted its biggest quarterly revenue growth in five years, driven by rising energy costs and lower sales of Windows software to computer makers. Sales growth in its cloud business also failed to meet analyst expectations.
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Alphabet, the parent company of Google, said profits fell 27% from a year earlier after advertisers cut insurance, credit, and mortgage costs on sales. The company’s revenue of $57.27 billion was also slightly below Wall Street estimates. By the close of yesterday, the stock had lost 1.85% shares of Meta fell more than 20% on Thursday to their lowest level since 2016 after the money-losing subsidiary of Metaverse reported lower revenue and higher expenses in the second quarter. Meta stock traded down another 6.09% in Thursday’s closing session.
Amazon shares fell 7% on Thursday after the company reported weaker-than-expected holiday sales. The company’s cloud business also showed its slowest growth since 2014. Amazon was down another 0.94% at Thursday’s close.
“When we see this kind of decline, it’s a clear sign that the economy is slowing down,” Bower sock Hill said. “Big Tech’s weaker-than-expected earnings are an important indicator of economic growth.“
Top 20 Nasdaq stocks
If you know “Why are Technology Stocks Down Today” then you must also know the latest top 20 Nasdaq stocks in the market.
Top 20 stocks |
Returns from 1-year high |
PE from 1-year high |
Analysts’ Rating |
||
| Buy | Hold | Sell | |||
| Apple | -26% | -31% | 77% | 17% | 6% |
| Microsoft | -35.8% | -37% | 95% | 5% | 0% |
| Alphabet (Google) | -42% | -40% | 97% | 3% | 0% |
| Amazon | -54% | 39% | 100% | 0% | 0% |
| Tesla | -56% | -85% | 44% | 30% | 26% |
| Nvidia | -60% | -56% | 83% | 7% | 10% |
| Facebook (Meta) | -71% | -61% | 84% | 13% | 3% |
| PepsiCo | -3% | -20% | 50% | 40% | 10% |
| Costco | -20% | -24% | 64% | 29% | 5% |
| ASML Holdings | -44% | -42% | 76% | 17% | 7% |
| AstraZeneca | -15% | 0% | 66% | 34% | 0% |
| Broadcom | -31% | -55% | 81% | 15% | 4% |
| T-Mobile US | -4% | -2% | 86% | 10% | 4% |
| Cisco | -32% | -35% | 50% | 50% | 0% |
| Amgen | -2% | -8% | 32% | 64% | 4% |
| Texas Instruments | -17% | -32% | 35% | 48% | 17% |
| Adobe | -57% | -56% | 83% | 17% | 0% |
| Honeywell | -9% | -9% | 48% | 48% | 4% |
| Comcast | -42% | 0% | 77% | 19% | 4% |
| Qualcomm | -43% | -60% | 68% | 32% | 0% |
Figures as of Nov 9 2022
A tough road ahead
Despite the uncertainty surrounding Big Tech stocks, the overall economy is not looking much better. Usually, when consumers are frustrated with the economy, they start cutting back on spending, which accounts for more than two-thirds of all economic activity in the country but consumer spending rose in July and September.
The U.S. economy regained growth and ended three consecutive months of the recession still, given the high market value of these stocks and the industry’s tendency to affect industry direction, disappointing earnings from tech heavyweights could drive the market south Tech stocks were particularly sensitive to the recession, rising interest rates, a strong dollar, and the overall economy.
“We seem to be heading into a recession and tech companies need to prepare for it,” says Sudeep Roy Chowdhury, CEO of sustainability tech company Eugenie.ai. “Some big tech companies are already slowing hiring, and some will be laid off.”
Alphabet CEO Sundar Pichai said during the company’s earnings call that alphabet must “respond to the economic environment,” and noted that cost-cutting measures such as staff cuts were imminent take steps, such as cutting hiring in certain business units, eliminating products and services where we think our resources are better elsewhere.”
There it is but financial analysts like bower sock Hill don’t expect the market to fall to levels seen earlier this summer, when investors sold off stakes in everything from semiconductor companies to gadget makers, at least for now. “We won’t see the full impact of higher prices and a sharply lower dollar until the fourth quarter of earnings,” he said. “We’re going to have a tough winter. I think the presence of tig tech is just an indicator of the cracks that are starting to show.
US Tech Stocks Falling
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