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Winners and losers in whirlwind US$1 trillion tech stock rout

Bloomberg
Bloomberg4/1/2022 12:16 AM GMT+08  • 4 min read
Winners and losers in whirlwind US$1 trillion tech stock rout
The reversal for some of 2021’s hottest stocks makes tech one of the worst-hit sectors in the S&P 500 / Bloomberg
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Tech stocks’ volatile start to 2022 offers a stark reminder of how harshly Wall Street is punishing the former stars of the pandemic era.

Onetime stay-at-home winners like Etsy Inc, Netflix Inc and PayPal Holdings Inc are among the biggest losers in the S&P 500 Index this year. They’re part of a US$1.3 trillion wipeout in market value for the Nasdaq 100 Index -- a tide so strong that even megacaps Amazon.com Inc and Apple Inc are struggling to stay in the green.

The reversal for some of 2021’s hottest stocks makes tech one of the worst-hit sectors in the S&P 500. Geopolitical tensions and supply chain hurdles have added to concerns over rising interest rates and surging bond yields -- which can hurt the present value of future profits.

“The pandemic winners now have to face a situation where all Covid-related tailwinds have disappeared and the current situation facing them is of economies suffering from huge inflation which is curbing individual purchasing power and putting pressure on discretionary spending going forward,” said Jim Dixon, a senior equity sales trader at Mirabaud Securities.

Some of that rout has turned around. Those who initially fled the sector have started to come back, enticed by discounts and the belief that some marquee names can continue to churn out bigger profits. Still, the Nasdaq 100, down 7.7%, is on pace for its first quarterly decline since the pandemic-driven selloff in March 2020 after falling into bear-market territory this month.

See also: Apple to lose 6 mil iPhone Pros from tumult at China plant

Here’s a look at some of the quarter’s standout moves:

1. Pandemic Boom to Bust

See also: Apple's reliance on China grows perilous with chaos in iPhone city

2. Social Media Slump

3. China’s Wild Ride

4. Faangs Diverge

5. Cybersecurity Boom

A strong rebound by US tech stocks over the last two weeks has driven one measure of market breadth to its highest in nearly a year. The Nasdaq 100 Index has seen its share of members that are trading above their 50-day moving average surge to 78%, the most since April 2021. It’s a rapid change of fortune for the gauge, which saw that figure plunge to two-year low of about 12% just over a month ago.

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