Facebook and Microsoft post gains
SAN FRANCISCO (MarketWatch) — The technology selloff has lopped off huge chunks of value, highlighted by big market cap drops in the sector’s high-fliers led by Apple and Amazon.
Apple AAPL -0.03% has shed about $28 billion in market cap since the beginning of the year, a 6% drop, according to data from FactSet. Amazon AMZN -0.10% gave up about $32 billion, or a decline of 18%. Twitter’s TWTR -0.30% market value has fallen 26%, as its market capitalization fell by $9 billion.
Other big name technology stocks have seen substantial cuts in market value: LinkedIn LNKD +0.27% fell by nearly $5 billion, or a loss of 18%; Yahoo YHOO -0.71% has given up $4.5 billion, or 11%; while Netflix NFLX -0.47% has declined by $1.5 billion, or 7%.
A notable exception in the downward trend is Facebook FB +0.46% , which has seen its market value grow by nearly $15 billion, or 11%, since the beginning of the year.
The Menlo Park, California-based company’s gains underscore Wall Street optimism about the growth potential of the world’s biggest social network, which analysts expect to record even stronger revenue gain with video ads and ads on Instagram.
Meanwhile, investors also appear to be turning to more mature tech powerhouses amid the uncertainty. For example, Microsoft MSFT -0.05% has seen its market value climb 7% by $22 billion, while Hewlett-Packard’s HPQ -0.53% value has grown by roughly $7 billion, or about 14%.
“There is something of a bubble going on in tech, and all of those but Apple have really high multiples,” Wedbush analyst Michael Pachter told MarketWatch. “It is easy to see how concerns about an overheated market would cause people to flee high-multiple stocks and to seek refuge in lower-multiple stocks.”
He also said there have been “some signs of slowing earnings or metrics growth [and they] are a big contributor. This quarter will either move the group higher or lower.”
This week’s earnings reports should paint a clearer picture.
Netflix is scheduled to report results after Monday’s closing bell. Facebook and Apple are set to report on Wednesday. Amazon and Microsoft will report on Thursday.