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Megacap Tech; Gone! $4.7 Trillion! Megacap Tech Peaked?

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Gone! $4.7 Trillion! Megacap Tech Peaked?

(CTN News) – S&P 500 winners used to be megacap tech stocks. Their losses are now more than $4.7 trillion, a record high.

Over the past year, Microsoft (MSFT), Alphabet (GOOGL) and Meta Platforms (META) have plunged by more than 34% in value. The S&P 500 dropped 18%. It’s more severe than the Dow Jones Industrial Average’s nearly 11% drop.

On Friday, Amazon.com (AMZN) dropped more than 10%.

Here’s the most critical part. The market value of these stocks is nearly $9 trillion, so a drop of this magnitude means massive losses. So far this year, investors have lost nearly half a trillion dollars on stocks thanks to these 15 stocks.

Losses like these are a problem for everyone. The value of these 15 stocks makes up 25% of the S&P 500. They fall harder the taller they are.

From Losers to Winners: Megacap Tech

Microsoft, Alphabet, Meta Platforms, and Amazon used to be must-have stocks for every investor a year ago. Now they can’t sell them fast enough.

On average, these 15 stocks are down 41% this year. Why is that? Investors are soured by a string of disappointing earnings. A lackluster outlook for future profits is also depressing valuations.

Profits at the companies are also looking shaky. Ten of the 15 megacap tech stocks posted lower profits in the fourth quarter than the same period last year.

Average drop? 45 percent. The year doesn’t look much better either. According to analysts, eight of the 15 companies will also post lower profits this year.

The Biggest Tech Losers

Microsoft’s market value has declined the most this year. Megacap Tech Stock prices have fallen 31%, wiping out a market value of $784 billion.

Third-quarter results weren’t the problem for the company. Revenue beat expectations by 1% and profit surpassed expectations by nearly 2% to $2.35 per share.

The company expects revenue in the current quarter of up to $53.4 billion, falling short of its target of $56.2 billion.

Others, however, are showing signs of peaking.

Techland’s profits are soaring

Google parent Alphabet’s profits may have temporarily peaked. A market value of $700 billion was wiped out by Alphabet’s shares this year. In Alphabet’s case, Megacap Tech analysts predict adjusted earnings will drop by more than 13% this year to $4.86 a share.

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