Traders on the NYSE, May 20, 2022.
Tech companies haven’t seen a dot-com bubble since 2001.
The Nasdaq fell 3.8% this week, the seventh consecutive week of decline. This is the longest losing streak for the technology-heavy index in 21 years.
Inflation, rising interest rates, the war in Ukraine and the epidemic lockdown in China have been a particularly volatile market in recent years since the historic rally, and especially for investors in technology and growth stocks.
The Federal Reserve has indicated that it will continue to raise rates to fight inflation, raising concerns that higher capital expenditures will be accompanied by a decline in consumer confidence in eating profit margins.
The Nasdaq has lost more than 29% since November 19, closing at 11,354.62 on Friday. The S&P 500 did not do so badly, but it did touch the bear market on Friday, dropping 20% from a high.
After computer networking giant predicted an unexpected revenue drop in the current quarter, Cisco was among the biggest technology losers for the week, down 13%. Once seen as a bellwether for the economy due to its expansion into enterprises, Cisco said its guidelines reflected the company’s decision to suspend operations in Russia and Belarus with uncertainty about supply shortages and when the situation would improve due to the Covid-19 lockdown in China.
“In light of this uncertainty, we are becoming more pragmatic about the current environment and, in terms of our approach, are making mistakes in terms of caution, taking it a quarter at a time,” the company said in its earnings call.
Dell CEO Michael Dale delivered a keynote address at the 2013 Oracle Open World Conference on September 25, 2013 in San Francisco, California.
Justin Sullivan | Getty Images
Dell, which reported the results on Thursday, fell more than 11% for the week. Shopify, which sells software for e-retailers, is down nearly 10%. Cloud software company Workday fell nearly 9% as analysts downgraded the stock amid fears of a recession. Security software vendor Okta 14% slide.
Stocks associated with billionaire Elon Musk also took a hit. Twitter, which is currently in the process of being bought by Tesla CEO at $ 54.20 per share, fell 6% this week to $ 38.29. Tesla is down 14%.
Among Big Tech, Apple is down 6.5%, following its weekly eight-week drop. Alphabet is down 6%, while Amazon is down about 5%.
The Nasdaq is now down 20% for the quarter and is on track for its worst quarterly performance since the fourth quarter of 2008.
Clock: CNBC interview with Cisco CEO Chuck Robbins