Selling pressure in on Big tech stocks
Stocks: We're 'nearing peak bear sentiment' on Big Tech, analyst says
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$Netflix(NFLX)$+5.82%
$Tesla Motors(TSLA)$-0.45%
$Amazon.com(AMZN)$+4.65%
$Microsoft(MSFT)$ +2.26%
$Meta Platforms, Inc.(FB)$+17.59%
$Salesforce.com(CRM)$+6.33%
$NASDAQ(.IXIC)$+3.06%
$Alphabet(GOOG)$+3.82%
$Alphabet(GOOGL)$+3.70%
The selling pressure in tech stocks amid slowing growth and rising interest rates is so brutal that an end has to be in sight, according to one tech analyst.
"Our conversations with institutional investors is clearly very negative [on Big tech stocks]," Piper Sandler tech analyst Brent Bracelin said on Yahoo Finance Live (video above). "Folks continue to be very concerned around increasing global risk. That said, my personal view is, it feels like we're kind of nearing peak bear sentiment."
Tech carnage is anywhere one looks right now.
All members of the closely watched FAAMG (Facebook, Amazon, Apple, Microsoft, and Google) complex, as well as Tesla and Netflix, are down more than 10% year to date. Tesla has dropped 18% in April alone as drama around CEO Elon Musk buying Twitter unfolds, and Netflix is down a whopping 68% year to date following a lackluster first quarter and weak subscriber guidance.
Alphabet didn't help its cause on Tuesday evening, posting a rare earnings miss on a shortfall for YouTube sales. The stock, among the most active tickers on the Yahoo Finance platform, also fell 3.75% in Wednesday's session.
A rare bright spot in tech this week is Microsoft as shares rose 4.8% on Wednesday after an earnings beat. Nevertheless, the company's stock has shed 15.8% so far this year.
Fintechs haven't been spared either, as Yahoo Finance's Ines Ferre reports.
PayPal is hovering around a 52-week low, and Robinhood's stock continues to suck wind as it struggles with execution issues (including laying off 9% of its workforce).
Overall, the Nasdaq Composite has shed 20% so far in 2022 — on Tuesday, the Nasdaq notched its worst session since September 2020 — and the S&P has declined 12% year to date.
Bracelin says sentiment is so negative on Big Tech that the point may be nearing where it makes sense to buy.
"Everyone is universally bearish," Bracelin said. "Typically when you have all investors on one side of the boat, that is typically when the boat flips. There is probably more risk for the next two quarters around slight changes to the numbers, factoring in these increasing global risks. But from a sentiment perspective, it's hard to see how things can get more bearish from here."
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Should wait till interest rate hikes pause