The cratering of big-cap technology and tech-related S&P 500 stocks is reaching epic proportions. And amazingly, it's getting worse.
Five of the 15 stocks in the Solactive FANG Innovation index, including Meta Platforms, Alphabet, Amazon.com and Microsoft, Thursday dropped to their lowest points in a year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
And that's saying something. The value of the stocks in the index is down 40% just this year, wiping out $5.5 trillion in market value. We're talking the biggest of the Big Tech stocks, too. Just these five stocks represent roughly a tenth of the S&P 500's total value.
Some of the examples conjure up memories of some of the worst times for stocks. Meta is an epic implosion. Shares of the social media darling turned virtual reality headache Thursday plunged to another new low. Shares are off more than 70% this year — making it the worst stock in the S&P 500. Nearly $700 billion in market value is gone — more than 496 S&P 500 stocks are individually worth.
"Stocks that have traded at excessive valuations have to be repriced, and that is what 2022 has largely been about," said David Bahnsen, chief investment officer, The Bahnsen Group. "Some Big Tech companies are still being adjusted to the realities of a more sensible valuation that is less speculative and more reality-based."
Plumbing New Lows In The S&P 500
The S&P 500 is down more than 21% this year. And much of the pain is due to stocks, especially tech titans, falling to new lows.
All told, 41 stocks in the S&P 500, or more than 8% of the index, dropped to a new 52-week low on Thursday. It's an increasing sign of strain, that's arguably most severe in technology. Nine of the S&P 500 stocks to fall to new lows hail from the information technology sector. That's more than with any of the 11 S&P 500 sectors.
And given just how important some big technology firms are, their falls hurt that much more. The Invesco S&P 500 Equal Weight ETF, which doesn't overweight the biggest companies, is only down 16.6% this year.
Where's The Most Big Cap Pain?
What's one of the most severe cases of a big-cap tech-related firm to hit new lows after Meta. It's Google parent Alphabet.
Shares of Alphabet dropped 42% this year, erasing more $840 billion in market value. And on Thursday, shares plunged to 83.43 a share, which is 4% below its previous 52-week low of 86.88 on Nov. 2. Investors are disappointed by the rapid drop-off in the company online advertising business. The company's adjusted profit per-share is expected to fall more than 14% in 2022.
Online retailer Amazon.com, though, isn't much better. Shares plunged Thursday to 89.33, or nearly 3% below their old 52-week low. The stock is now down more than 46% this year, wiping out nearly $780 billion in market value. Investors are stunned by the company's drop back into the red. Analysts think the company will lose an adjusted 7 cents a share this year, down from a profit of $3.24 a share in 2021.
Even Microsoft, one of the bluest of blue chips, is seeing its stock get whipped around like a cheap stock. Shares are now trading at 214.25, a new 52-week low. The stock is down more than 36% this year, erasing a nearly incomprehensive $927 billion. In other words, just this year Microsoft has lost more value than 496 companies in the S&P 500 are worth.
In this S&P 500, there's a constant reminder that stocks can keep finding new lows.
Big-Cap Tech-Related Stocks At New 52-Week Lows
Stocks in the Solactive FANG Innovation index setting new 52-week lows
| Company | Symbol | Stock year-to-date % ch. | Market value lost this year ($ billions) | Sector | % S&P 500 |
|---|---|---|---|---|---|
| Microsoft | -36.3% | -$928 | Information Technology | 4.7% | |
| Alphabet | -42.4 | -$842 | Communication Services | 3.2% | |
| Amazon.com | -46.4 | -$780 | Consumer Discretionary | 2.7% | |
| Meta Platforms | -73.6 | -$700 | Communication Services | 0.7% | |
| Qualcomm | -43.2 | -$88 | Information Technology | 0.3% |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
