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NY Times: 5 Tech Companies Lost $800 Billion in Market Value

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Wednesday, 21 November 2018 08:35 AM

The seemingly endless tech-stock bloodbath reportedly has erased $822 billion in market valued from the FAANG group of stocks: Facebook, Amazon, Apple, Netflix, and Google-parent Alphabet.

Facebook (FB), Apple (APPLE) and Amazon (AMZN) have endured the greatest declines, all down $250 billion or more from their respective peaks, the New York Times reported.

"That is a marked reversal for one of the most popular trades on Wall Street. Investors piled into shares of the largest tech companies, betting their revenue would continue to grow strongly as these behemoths upended industries from retail to communication to media," the Times explained.

By the end of August, the market value of Apple and Amazon had each surpassed $1 trillion, and Alphabet was flirting with $900 billion. The combined market value of the five had reached $3.6 trillion, the Times reported.

But worries about global economic growth as well as lackluster earnings and outlooks the past two quarters have investors questioning whether the values of these big tech companies have become too lofty.

Newsmax Finance Insider Peter Morici recently Newsmax TV that the FAANG plunge reflects that “several of these stocks have got real problems.”

“Apple has no one left to sell” iPhones to since it has essentially lured every potential customer with numerous model upgrades, he told "Income Generation."  The company now must hike prices. Morici said Amazon and Google face antirust woes.

Netflix (NFLX) must determine how its shows will continue to make money long after production stops.

“Amazon doesn't make a lot of money selling stuff. They make a lot of money with cloud services and that is not an infinite market,” the economist and business professor at the University of Maryland told Income Generation. “So my feeling is that a lot of these techs are not the growth stocks that they have been presented us.”

To be sure,  the causes are many, from the nagging privacy issues at Facebook and Google (GOOG) to slumping demand for semiconductors and smartphones to the U.S.-China trade war.

And all of them point to a seemingly inescapable truth -- that the days of never-ending profit growth are coming to an end, Bloomberg explained. So after an incredible decade-long run in which the Nasdaq soared more than 500 percent, many Wall Street investors have decided the sector is just too pricey.

“Investor optimism is more curbed,” says Alex Chompff, an angel investor and consultant who took a few of his investing pals to the Founders Space event. “It has an upper boundary that it may not have had a year ago.”

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As investors have dumped shares of Facebook, Amazon, Apple, Netflix, and Google-parent Alphabet, $822 billion in value has been wiped off their combined market value since the end of August.
tech, companies, billion, market, value
Wednesday, 21 November 2018 08:35 AM
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