The market capitalization of US tech giants evaporated $ 3.2 trillion

The capitalization of some of America’s biggest tech companies has fallen by more than $3.2 trillion this year after a rough week when they posted disappointing results.

According to Business Insider, the market capitalization of the “GAMMA” group – which includes Google, Apple, Microsoft, Meta and Amazon – has dropped by more than $300 billion in total this week alone.

Specifically, the market capitalization of e-commerce giant Amazon fell by $170 billion after predicting a weak holiday sales outlook. This is seen as a clear sign that consumers are starting to tighten their belts to deal with inflation that remains high in the US.

Meanwhile, the capitalization of Alphabet – Google’s parent company has dropped $ 80 billion compared to the beginning of the week when it reported stagnant business results. The cause they cite is the weakening of digital advertising – a reminder that a recession is very likely on the way.

For its part, Microsoft is not much better when it announced the slowest revenue growth in 5 years as global personal computer sales tend to slow down.

Stocks of technology giants have experienced many fluctuations in recent times due to the impact of soaring inflation in the US. That has affected investor confidence.

Many economists say these signs suggest a recession is likely next year. Last month, the US Federal Reserve had to continue to raise interest rates to cope with inflation. This causes the cost of a mortgage, car or business loan to be higher. Consumers and businesses will then be able to borrow and spend less, thereby reducing inflation. That would slow economic growth, though.

In the GAMMA group, Apple seems to be the most positive as the company’s capitalization increased by $ 178 billion on Friday (October 28) after posting better-than-expected quarterly profit. Still, Apple stock is down nearly 15% this year.

This week, the GAMMA group’s market capitalization decline is as follows: Amazon – 14%, Meta – 22%, Alphabet – 5.4% and Microsoft – 3.3%. Despite the news, some analysts still think these tech giants are still good investments.

Wedbush analyst Michael Pachter wrote in a research note: “In the long-term, Amazon will benefit from steady margin expansion driven by the continued growth of its advertising and cloud businesses. cloud”.

Meanwhile, Meta may face an uphill battle as CEO Mark Zuckerberg is repeatedly criticized for investing too much money and effort into the metaverse project and neglecting to improve social networks. associations and profitable applications.

Meta stock is down 70% since the start of the year. As of Thursday (October 27), Zuckerberg’s net worth has dropped by $81 billion since Facebook rebranded to Meta.

“Mark Zuckerberg is battling a decline in investor confidence and skepticism as well as Meta employees,” said one analyst. Besides, TikTok is also attracting millions of their potential young customers.”

Source: BIEN