Technology Companies in the US Stock Market Continued to Drop
The stock prices of several important technology companies in the US stock market continued to drop, the Nasdaq index fall more than 1% for the third consecutive trading day. The top 10 technology companies in the US market collapsed and instantly evaporated $82.7 billion.
Co-branded by Facebook, Amazon, Apple, Netflix and Google’s parent company, Alphabet, the so-called FAANG, the five major technology giants began this week with a falling price.
After Cambridge’s analysis, Facebook’s share price has reached a record high, and Twitter has nearly doubled this year.
However, the release of the latest quarterly financial reports triggered a concern that the number of users has stagnated and it is difficult to continue to grow under the increasingly strict privacy regulations, causing the stock price to plummet.
Twitter also has no good news, because the new privacy regulations, and their efforts to clean up the platform, causing their users to shrink slightly, lost 1 million users in the previous season, and may be in the next few million, because it will Continue to “strongly invest” in the health of the platform. Twitter’s share price fell by 8% on Monday.
Not only Facebook, Netflix’s share price has fallen more than 10% this month, because its number of users is about 1 million less than the previous season’s estimate. On Monday, Netflix’s share price fell more than 5%.
Is it a transformation or a recession?
The investment transformation made by Facebook and Twitter is necessary to some extent. To adjust their data collection strategy, to abide by GDPR, to provide higher security, not just to think about how to earn advertising revenue. How to maintain the health and safety of its platform is also important.
For the advertising-based business model, stricter privacy standards are only one of the problems, and both companies have user ceilings. Facebook is now about 2.23 billion monthly users, and Twitter is about 335 million.
Facebook effectively expands the number of users in major markets in Europe and the United States, while rethinking the core APP experience, emphasizing time-limited dynamics. Does this generate the same rate of interest as traditional dynamic news? Facebook CEO Sandberg said: We honestly say we don’t know.
This uncertainty has hit Wall Street.
The story of transformation is so moving, but the number of Twitter users may always be stuck on the ceiling of 300 million people. Investors can’t see growth and only see horror stories.
Apple is the last FAANG company to announce last quarter’s earnings, but even if it exceeds expectations, it may not change the pessimism of investors on technology stocks.
The correction will be greater than February
If technology stocks can no longer be relied on, are there other alternatives? Nick Colas, co-founder of DataTrek Research, suggests that finance and manufacturing may be an option.
Morgan Stanley warned that the market is undergoing corrections, and the correction may be larger than in February this year.
“The sell-off may be just the beginning. This revision will be the biggest since February,” Morgan Stanley wrote on Monday’s report: “If this wave correction is like our technology, it is not necessary. Focusing on consumer goods and small-cap stocks will have a greater negative impact on the portfolio.”