The fall of the post-COVID-19 tech giants

The FAANG group is already familiar to investors and technology enthusiasts. Facebook, Amazon, Apple, Netflix and Google are known as giants in the tech world.

In the 2 years the world experienced the COVID-19 pandemic, while many other industries had to shrink, these giants exploded even more, there was a time when these giants seemed to be invincible names. . However, the post-pandemic story presents a very different picture. Most of the big boys in the FAANG group stumble. The year 2022 brings many challenges and the market asks, is the FAANG group “open”?

Jeff Bezos, the boss of Amazon, foresaw this day. Exactly a month ago, he shared the tweet: “People assume the market euphoria is forever, until they realize that’s not the case. The lessons of the market may be… It’s a painful blow to remember.”

Over the past 13 years, the tech industry has become an almost undefeated sector in the stock market. Apple, Facebook, Amazon, Silicon Valley’s trillion-dollar club were all born in this period. However, only in the first few months of 2022, when the pandemic was gradually brought under control, other industries gradually recovered, the market continuously witnessed the stumbling blocks of technology giants.

Apple is no longer the most valuable company in the world. Facebook (now known as Meta), in just one day the stock plunged 20% and wiped out $230 billion in market value. Amazon also reported a loss for the first time since 2015. A series of big waves caused the ship called big tech to stall in the role of market leader.

“I think equity investors should start to get worried. Tech stocks have always been the market leaders, but now they’re taking a hit. The tech industry can’t avoid the pressure from macro factors as well. such as commodity price inflation, rising transportation costs, or policies and workers, the more well-known technology companies are, the easier it is to become a target for national authorities to squeeze. tight,” said Max Wolf, CEO of Systematic Ventures.

Netflix is ​​a prime example of weakening after the world gets better. When the COVID-19 epidemic made people stay at home to watch more entertaining movies, Netflix collected up to 36 million new registered accounts, but after disappointing business results announced in April, FAANG’s N lose up to half of its market value.

Not only the big guys, but also the small technology startups, which grew explosively during the pandemic, are now starting to slow down. The online video calling application Zoom during the pandemic has grown 5 times, now the stock is back to almost the same as it was before the COVID-19 epidemic.

Difficulty is due to many other reasons. For example, the war between Russia and Ukraine caused Facebook to stop operating in Russia and not accept ads for Russian businesses, which also affected revenue. And Google has repeatedly run into trouble with EU authorities over antitrust competition, with shares of parent company Alphabet falling 20% ​​since the start of the year.

Some experts believe that technology stocks will still face difficulties from now until the end of the year when many investors sell off to raise capital, but if kept for 3-5 years, they can still be profitable, and confirmed. This is not the end of the technology era.