Mass sell-offs of stock this week have driven the NASDAQ to the lowest it has been in nearly two years.
Many of the biggest names in technology experienced large drops this week, contributing to a landmark 5% overall drop for the US stock market.
Amazon, Asana, Meta, and Netflix were among the companies with the biggest drops in stock price, down 7.5%, 11.3%, 6.77%, and 7.69% respectively.
Google parent company Alphabet and Microsoft were down more than 4% each by market close on Thursday. E-commerce platforms Shopify, Ebay, and Etsy also posted double-digit drops.
None of the tech companies have shown signs of rebounding as of Friday morning, as investor confidence in tech is said to be waning.
Investors started selling off US tech stocks last year and the trend came to a head in the first days of 2022 as the NASDAQ again dropped 3.3% to a then-landmark low, its worst day since February 2021, the Financial Times reported.
Technology and cloud stocks became popular throughout the pandemic due to the rising demand for remote solutions and an increased demand for technology to keep a remote workforce operational.
A combination of factors, including the prospect of growing interest rates, rising levels of inflation, and the war in Ukraine, have seen investors instead turn towards sectors such as energy, utilities, and financial services – three industries that appear better protected from economic threats.
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Tech companies reported challenging quarters for Q1 2022, with some, such as Meta and Apple, saying they are imposing cross-company hiring freezes following mixed earnings reports.
“We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly," said Meta spokesperson Andrea Beasley to CNN a week after reporting its slowest growth in years.
Amazon’s most recent report indicated growth in AWS, its cloud business, and consumer units, but operating cash flow and operating income were two of the standout metrics that posted substantial decreases.
The e-commerce giant also said it is “no longer chasing physical or staffing capacity” after announcing its most recent quarterly earnings. Instead, the company is “squarely focused on improving productivity and cost efficiencies” throughout its fulfilment network, though these “may take some time” to materialise.
