Trending: Investing in Bitcoin / 5 reasons to invest in Amazon / Investing in the Metaverse
Wednesday, January 25, 2023
INVESTOR TIMES
  • Home
  • News
    Bets increase on a soft landing in the U.S

    Bets increase on a soft landing in the U.S

    69% of investors believe metaverse entertainment will change social lifestyles

    69% of investors believe metaverse entertainment will change social lifestyles

    European oil companies want to follow in Chevron’s footsteps to operate in Venezuela

    European oil companies want to follow in Chevron’s footsteps to operate in Venezuela

    Amgen buys Horizon Therapeutics for US$ 25 billion

    Amgen buys Horizon Therapeutics for US$ 25 billion

    Europe prepares law to make airlines that pollute more pay higher costs

    Europe prepares law to make airlines that pollute more pay higher costs

    Why are Asian investors selling their tech stocks?

    Why are Asian investors selling their tech stocks?

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Are technology stocks coming to the end of their reign?

    Are technology stocks coming to the end of their reign?

    Amazon fined millions for manipulating algorithms in its favor

    Amazon fined millions for manipulating algorithms in its favor

  • Markets
    Bets increase on a soft landing in the U.S

    Bets increase on a soft landing in the U.S

    What are CFDs and what are their advantages?

    Getting started with CFD trading

    Goldman Sachs lands with more strength at Santander and BBVA

    Goldman Sachs lands with more strength at Santander and BBVA

    With inflation in recession, what stocks should you consider?

    With inflation in recession, what stocks should you consider?

    Should payment for order flow be maintained in the stock market?

    Should payment for order flow be maintained in the stock market?

    Why are Asian investors selling their tech stocks?

    Why are Asian investors selling their tech stocks?

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Are technology stocks coming to the end of their reign?

    Are technology stocks coming to the end of their reign?

    Inflation is starting to ease but not enough

    Inflation is starting to ease but not enough

  • Investing
    Two biotech stocks that could explode soon

    Two biotech stocks that could explode soon

    Ideas for investing in the electric vehicle industry

    Ideas for investing in the electric vehicle industry

    Mercado Libre could be one of the best investments for the long term

    Mercado Libre could be one of the best investments for the long term

    Three cheap tech stocks for 2023

    Three cheap tech stocks for 2023

    Where to invest in 2023? These are the most likely trends

    Where to invest in 2023? These are the most likely trends

    Will Ford shares be profitable in 2023?

    Will Ford shares be profitable in 2023?

    Some interesting options for investing in leisure and travel companies

    Some interesting options for investing in leisure and travel companies

    Plug Power’s commitment to green hydrogen

    Plug Power’s commitment to green hydrogen

    Investing in Auto Trader: vehicle sales at a turning point

    Investing in Auto Trader: vehicle sales at a turning point

  • Technology
    Banning TikTok in the U.S. could benefit Meta

    Banning TikTok in the U.S. could benefit Meta

    Microsoft leads the ranking of the best-managed companies in 2022

    Microsoft leads the ranking of the best-managed companies in 2022

    Apple: consequences of the Foxconn conflict will continue until 2023

    Apple: consequences of the Foxconn conflict will continue until 2023

    5 must-have skills to get a job in 2023

    5 must-have skills to get a job in 2023

    UK changes strategy on Internet content control

    UK changes strategy on Internet content control

    EU organized a party in the metaverse and nobody attended

    EU organized a party in the metaverse and nobody attended

    The metaverse companies with the highest revenues in 2022

    The metaverse companies with the highest revenues in 2022

    Electric vehicles: China aims to boost its dominance

    Electric vehicles: China aims to boost its dominance

    Nintendo sells 10 million Switch in 3 days and its shares rise

    Nintendo sells 10 million Switch in 3 days and its shares rise

  • CryptocurrenciesTRENDING
    69% of investors believe metaverse entertainment will change social lifestyles

    69% of investors believe metaverse entertainment will change social lifestyles

    Bitcoin falls after Fed decision to raise interest rates by 0.50%

    Bitcoin falls after Fed decision to raise interest rates by 0.50%

    The future of cryptocurrencies, according to Larry Fink

    The future of cryptocurrencies, according to Larry Fink

    How Much Bitcoin Should You Buy: 5 Factors to Consider in 2023

    How Much Bitcoin Should You Buy: 5 Factors to Consider in 2023

    Between two extremes: what will the price of Bitcoin be in 2023?

    Between two extremes: what will the price of Bitcoin be in 2023?

    FTX crash spreads and affects BlockFi

    FTX crash spreads and affects BlockFi

    EU organized a party in the metaverse and nobody attended

    EU organized a party in the metaverse and nobody attended

    Why does The WSJ continue to question Tether’s financial health?

    Why does The WSJ continue to question Tether’s financial health?

    Brazilian Congress approves bill to regulate cryptocurrencies

    Brazilian Congress approves bill to regulate cryptocurrencies

  • Home
  • News
    Bets increase on a soft landing in the U.S

    Bets increase on a soft landing in the U.S

    69% of investors believe metaverse entertainment will change social lifestyles

    69% of investors believe metaverse entertainment will change social lifestyles

    European oil companies want to follow in Chevron’s footsteps to operate in Venezuela

    European oil companies want to follow in Chevron’s footsteps to operate in Venezuela

    Amgen buys Horizon Therapeutics for US$ 25 billion

    Amgen buys Horizon Therapeutics for US$ 25 billion

    Europe prepares law to make airlines that pollute more pay higher costs

    Europe prepares law to make airlines that pollute more pay higher costs

    Why are Asian investors selling their tech stocks?

    Why are Asian investors selling their tech stocks?

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Are technology stocks coming to the end of their reign?

    Are technology stocks coming to the end of their reign?

    Amazon fined millions for manipulating algorithms in its favor

    Amazon fined millions for manipulating algorithms in its favor

  • Markets
    Bets increase on a soft landing in the U.S

    Bets increase on a soft landing in the U.S

    What are CFDs and what are their advantages?

    Getting started with CFD trading

    Goldman Sachs lands with more strength at Santander and BBVA

    Goldman Sachs lands with more strength at Santander and BBVA

    With inflation in recession, what stocks should you consider?

    With inflation in recession, what stocks should you consider?

    Should payment for order flow be maintained in the stock market?

    Should payment for order flow be maintained in the stock market?

    Why are Asian investors selling their tech stocks?

    Why are Asian investors selling their tech stocks?

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Here’s what the economy and markets will look in 2023, according to JP Morgan

    Are technology stocks coming to the end of their reign?

    Are technology stocks coming to the end of their reign?

    Inflation is starting to ease but not enough

    Inflation is starting to ease but not enough

  • Investing
    Two biotech stocks that could explode soon

    Two biotech stocks that could explode soon

    Ideas for investing in the electric vehicle industry

    Ideas for investing in the electric vehicle industry

    Mercado Libre could be one of the best investments for the long term

    Mercado Libre could be one of the best investments for the long term

    Three cheap tech stocks for 2023

    Three cheap tech stocks for 2023

    Where to invest in 2023? These are the most likely trends

    Where to invest in 2023? These are the most likely trends

    Will Ford shares be profitable in 2023?

    Will Ford shares be profitable in 2023?

    Some interesting options for investing in leisure and travel companies

    Some interesting options for investing in leisure and travel companies

    Plug Power’s commitment to green hydrogen

    Plug Power’s commitment to green hydrogen

    Investing in Auto Trader: vehicle sales at a turning point

    Investing in Auto Trader: vehicle sales at a turning point

  • Technology
    Banning TikTok in the U.S. could benefit Meta

    Banning TikTok in the U.S. could benefit Meta

    Microsoft leads the ranking of the best-managed companies in 2022

    Microsoft leads the ranking of the best-managed companies in 2022

    Apple: consequences of the Foxconn conflict will continue until 2023

    Apple: consequences of the Foxconn conflict will continue until 2023

    5 must-have skills to get a job in 2023

    5 must-have skills to get a job in 2023

    UK changes strategy on Internet content control

    UK changes strategy on Internet content control

    EU organized a party in the metaverse and nobody attended

    EU organized a party in the metaverse and nobody attended

    The metaverse companies with the highest revenues in 2022

    The metaverse companies with the highest revenues in 2022

    Electric vehicles: China aims to boost its dominance

    Electric vehicles: China aims to boost its dominance

    Nintendo sells 10 million Switch in 3 days and its shares rise

    Nintendo sells 10 million Switch in 3 days and its shares rise

  • CryptocurrenciesTRENDING
    69% of investors believe metaverse entertainment will change social lifestyles

    69% of investors believe metaverse entertainment will change social lifestyles

    Bitcoin falls after Fed decision to raise interest rates by 0.50%

    Bitcoin falls after Fed decision to raise interest rates by 0.50%

    The future of cryptocurrencies, according to Larry Fink

    The future of cryptocurrencies, according to Larry Fink

    How Much Bitcoin Should You Buy: 5 Factors to Consider in 2023

    How Much Bitcoin Should You Buy: 5 Factors to Consider in 2023

    Between two extremes: what will the price of Bitcoin be in 2023?

    Between two extremes: what will the price of Bitcoin be in 2023?

    FTX crash spreads and affects BlockFi

    FTX crash spreads and affects BlockFi

    EU organized a party in the metaverse and nobody attended

    EU organized a party in the metaverse and nobody attended

    Why does The WSJ continue to question Tether’s financial health?

    Why does The WSJ continue to question Tether’s financial health?

    Brazilian Congress approves bill to regulate cryptocurrencies

    Brazilian Congress approves bill to regulate cryptocurrencies

INVESTOR TIMES
Home Markets
ACTUALIZADO: December 11, 2022

Are technology stocks coming to the end of their reign?

Santiago Contreras by Santiago Contreras
12/13/2022 - 9:14
in Markets, News
Reading Time: 3 mins read
Share on FacebookShare on TwitterShare on LinkedIn

Shares of U.S. technology giants have remained the darling of the New York Stock Exchange for several years. However, this year their fall on the Nasdaq has been devastating in the midst of a very prolonged bear market.

Some investors believe that the crisis of several of the tech companies goes beyond that and signifies the end of an era. Companies such as Facebook parent Meta Platforms Inc. and Amazon.com Inc. have suffered monumental drops in their market price this year.

The growth of the shares of these companies, known as FAANG, which include Apple Inc, Netflix Inc. and Alphabet Inc, the parent company of Google, were leading the market for 13 years.

Even more so during the two pandemic years when their growth was exponential. But that bullish streak seems to have come to an end. And history shows that companies or technologies that dominate one era generally decline in strength in the next.

Weaker growth for tech stocks

Analysts believe that certain signs are already being observed in the market that reveal a change in pattern. The incredible growth experienced by Meta and Netflix a few years ago has slowed or died out.

While the size and share price achieved by Apple, Alphabet and Amazon seem to have peaked. So it is unlikely that their stocks will return to their previous gigantic returns and remain on the crest of the wave any longer.

So believes Janus Henderson Investors portfolio manager Richard Clode. “We think FAANG is unlikely to lead the next tech bull cycle.” In fact his firm substantially reduced its holdings in this stock.

“We are less exposed to FAANG than we have been since the acronym was introduced,” the expert added.

Considering that the tech giants are indeed coming to the end of a historic cycle in the stock market, what was that end?

Since the onset of the covid-19 coronavirus pandemic in March 2020 the stock market was shaken. Incredibly, however, not only did the indices recover, but the stocks of most large-cap technology companies achieved a major boost.

Online purchases of products and services on Amazon increased, and subscriptions on Netflix grew. Facebook users spent more time stalking or searching on Google via an iPhone.

The point is that investors right now are reevaluating their options and their long-term investments. They’re trying to figure out what’s next. Especially at a time of uncertainty generated by high interest rates and unbeatable inflation.

Reduced appetite for risk

Many investors successfully bet on the returns generously offered by the ever-growing technology stocks. Everyone wanted to hold these stocks in their portfolios, confident of their performance.

But now that the appetite for risk has diminished markedly and the growth potential of tech stocks is in question, the bet is more measured. Tech stocks are becoming less attractive to investors.

In November, Goldman Sachs strategists proclaimed that expectations of outperformance in tech stocks had faded. Instead of the 13% expected for the S&P 500 this year, earnings would fall 8% for large-cap tech stocks.

Although Goldman experts forecast 2023 and 2024 outperformance for tech companies, their performance will be lower than the average recorded over the past 10 years, they said.

A past that will not return

“It’s very difficult to grow these mega-earnings at very, very high growth rates as they have in the past,” explained UBS Asset Management senior investment analyst and portfolio manager Michael Nell

He added that “while mega-cap stocks have held up well, going forward it’s hard to see them necessarily driving performance from here.”

In late October, Meta shares lost a quarter of their value in a single day. This came after the company’s fourth-quarter earnings guidance was released. Expectations came in below the lower level expected due to a slowdown in the advertising market.

On the other hand, Amazon.com’s stock plunged 7% after the company forecast that its summer growth would be the slowest in the company’s history.

Examples of other tech companies that were leading the stock market and then plunged needless to say. For good. This was the case with Cisco Systems Inc. and Intel Corp. Both companies were leaders during the dot-com era of the 1990s.

After posting record high prices in 2000, they never again topped the indexes. Meanwhile, the Nasdaq 100 had to wait 15 years to surpass the peak reached that year.

Apple remains the most attractive

Of all the technology companies, Apple has been the best performer. It is not in vain that until this year it was the largest company in the world. Its current market value is 2.3 trillion dollars. It is below the Saudi oil company Aramco.

However, Apple shares also plunged by 20% this year. It fell less than the other tech stocks due to its extraordinary liquidity (approximately $170 billion in cash). In addition to the marketable securities and the continued high demand for its products.

The rest of the FAANG Group stocks have seen deep declines this year. Alphabet fell 36% while Meta plunged 66%. But despite these sharp declines, the tech group still accounts for more than 10% of the S&P 500’s weighting.

This means that the underperformance of these companies will continue to weigh on the rest of the market in the coming years. It is also likely that the decline in technology stocks will continue through 2023.

Expectations for 2023

For next year, analysts expect technology sector returns to decline 1.8% compared to expectations of 2.7% growth for the entire U.S. market, according to data published by Bloomberg Intelligence.

The current low appetite for risk and the high cost of money is leading investors to be more cautious when choosing stocks. Tech companies like Meta that have bet everything on the Metaverse have yet to see the results, losing tens of billions.

Other tech stocks have not performed well either. In fact, a set of stocks that showed promise analyzed by Goldman have lost about 60% this year.

“Be a little more realistic: grow a little slower.”

“The market is telling them that we want short-term profitability and we can’t afford to fund all of their negative free cash flow. Be a little more realistic: grow a little slower, but do it profitably,” said Columbia Threadneedle Investments head of global equities Neil Robson.

Unlike other firms, Robson maintains a high volume of technology stocks in his portfolio. He has just decreased his holdings. He still holds positions in Alphabet and Amazon, but has diversified his portfolio into energy stocks.

Other investment firms such as UBS Asset Management’s Nell have investments in service software and semiconductor stocks. In contrast, Clode of Janus Henderson prefers cybersecurity stocks, artificial intelligence and analyzes energy.

“Two years ago we could have thrown a dart at a FAANG dart board and pretty much won, right?” noted Dan Morgan, senior portfolio manager at Synovus Trust Co. “That probably won’t work anymore.”

Tags: AppleFAANGFacebookMetaNetflixtechnological stocks

Related articles

Bets increase on a soft landing in the U.S
Markets

Bets increase on a soft landing in the U.S

by Alejandro Gil
— January 24, 2023
69% of investors believe metaverse entertainment will change social lifestyles
Cryptocurrencies

69% of investors believe metaverse entertainment will change social lifestyles

by Santiago Contreras
— January 24, 2023
What are CFDs and what are their advantages?
Markets

Getting started with CFD trading

by David Romero
— January 24, 2023
European oil companies want to follow in Chevron’s footsteps to operate in Venezuela
Companies

European oil companies want to follow in Chevron’s footsteps to operate in Venezuela

by Alejandro Gil
— December 17, 2022
Goldman Sachs lands with more strength at Santander and BBVA
Markets

Goldman Sachs lands with more strength at Santander and BBVA

by Pablo Petovel
— December 17, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Last published articles

Bets increase on a soft landing in the U.S
Markets

Bets increase on a soft landing in the U.S

by Alejandro Gil
— January 24, 2023
69% of investors believe metaverse entertainment will change social lifestyles

69% of investors believe metaverse entertainment will change social lifestyles

by Santiago Contreras
  January 24, 2023

What are CFDs and what are their advantages?

Getting started with CFD trading

by David Romero
  January 24, 2023

European oil companies want to follow in Chevron’s footsteps to operate in Venezuela

European oil companies want to follow in Chevron’s footsteps to operate in Venezuela

by Alejandro Gil
  December 17, 2022

Goldman Sachs lands with more strength at Santander and BBVA

Goldman Sachs lands with more strength at Santander and BBVA

by Pablo Petovel
  December 17, 2022

Facebook Twitter LinkedIn Telegram RSS

ABOUT INVESTOR TIMES

INVESTOR TIMES is an independent publication of economic, finance and investment content, owned and operated by Altas Ventures.

MORE ABOUT US

  • Our team
  • Work with us
  • Advertise on IT
  • Contact
  • Corporate information
  • Terms of Use
  • Cookies Policy
  • Privacy Policy

INTERNATIONAL EDITIONS

Investor Times in English

Investor Times en Français

Investor Times in Deutsch

Investor Times in Italiano

Investor Times em Português

Investor Times po Polsku

Investor Times на русском языке

El País Financiero (edición en Español)

© ATLAS VENTURES SLU, all rights reserved. Any information contained in INVESTOR TIMES is for educational and/or informational purposes only, it is not financial and/or investment advice. INVESTOR TIMES may obtain economic retribution by recommending services or products of third parties. INVESTOR TIMES does not accept, nor will it accept in the future, subsidies or funds from Governments, political parties or public institutions.

No Result
View All Result
  • Home
  • News
  • Markets
  • Investing
  • Cryptocurrencies
  • Technology

  •  EXCLUSIVE  3 Russian men are the real perpetrators behind Juicy Fields, says Glanse

     NEW  Compound Interest Calculator

     TRENDING 
    Investing in Bitcoin Investing in the Metaverse 5 reasons to invest in Amazon

© ATLAS VENTURES, all rights reserved.