![]() On this measure, there is ample room for further declines, particularly since markets often overshoot on the way down as well as on the way up. Multiples of revenues were a favourite that growth investors used to chase stocks higher, at least until the turn that set in last November. As investors grope for more appropriate financial yardsticks with which to judge these companies, as well as the right valuation multiples to apply to those metrics, volatility is likely to remain high. This is where valuations became most stretched, and where the market is having most trouble finding its nadir. The axe is hanging, rather, over high-growth tech companies. But in general, Big Tech’s premium to the rest of the market has been largely erased and the companies’ defensive qualities are likely to show through in tougher economic times. Amazon is suffering an uncharacteristically severe adjustment after a massive spending binge, while the issues facing Meta as the former Facebook tries to reposition itself as a metaverse company are little short of existential. That is a decline of 26 per cent, twice the drop in the Dow Jones Industrial Average. Between them, the five biggest tech companies have shed nearly $2.6tn. This is not so much an issue for Big Tech, though the wealth erased since the start of the year is significant. There are plenty of reasons to believe it isn’t over. ![]() Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.įor anyone who watches the stock market for a living, the recent car crash in tech stocks has been mesmerising.
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