Tech investors resumed their selloff of the large-cap FAANG stocks, with the five tech giants all sustaining declines of 20% or more, enough to push them into bear-market territory.
Alphabet’s stock closed Monday at $1,020 a share, marking a 20% decline from its record high of $1,273.84 a share in late July. Apple’s stock is down 20.3% from its Oct. 3 high, while Amazon has lost 26.3% of its value since early September. Netflix has slid 36.1% since reaching a peak in late June, while Facebook’s stock has dropped 38.8% since late July.
Not long ago, the stocks of the five tech giants seemed to be a safe bet, with stocks volatile at times but always recovering from selloffs to march on to new highs. The tide began to change this summer, with a growing sense that the nine-year-old bull market was losing steam, leaving the mighty FAANG at precarious valuations right as growth in their earnings was poised to slow down.
Last month, disappointing forecasts from Apple, Amazon, and Facebook spurred a selloff that is continuing this week. Apple fell 4% Monday after the Wall Street Journal reported that the company cut orders to suppliers for the three iPhone models introduced in September.
Facebook, meanwhile, fell 5.7% Monday amid rising concerns it could face more regulatory scrutiny. Facebook’s stock is trading at its lowest level since January 2017. Jason Calacanis, an early investor in the company who sold off shares after deciding CEO Mark Zuckerberg was “completely immoral,” told CNBC Monday that the social network had entered a crisis stage.
“This is a true crisis for Facebook,” Calacanis said. “It’s possible, maybe not probable but possible, this could be their AOL peak, their Yahoo peak,” referring to years of slow decline in the audience and relevance of those early internet leaders once they reached their peak.