Snap's move this week seems to symbolize investors' concerns and hopes for U.S. technology stocks.
Snap plunged 23 percent on Feb. 3 as investors feared weak performance from Facebook's parent company, Meta, would broadly impact the digital advertising industry. Investors quickly realized, however, that these fears were unfounded, and Snap shares rebounded 60% in after-hours trading.
As of the close of trading on February 4, Snap shares were quoted at $38.91 per share, up 58.82%.
According to the Financial Times, many investors feel that the story of high growth in technology stocks is shattered, but Jim Tierney, chief investment manager of Abbey Growth Stocks, said: "I don't think the high-growth stock markets of big tech companies have been broken, and the strong demand for the digital economy, cloud computing services and personal computers and smartphones means that these companies should run out of growth in 2022." ”
Brent Thill, an analyst at Jefferies Group, also said: "The economy is slowing, but it is not falling off the cliff, and I think these technology companies are really resilient." ”
Late Thursday, the earnings season for big tech companies came to an end, and Amazon's earnings gave all investors a sigh of relief.
Despite lower-than-expected revenue, the surge in demand for advertising and cloud computing has led to a lot of profit growth for Amazon. Amazon surged 15% after hours on Thursday, and as of Friday's close, Amazon was quoted at $3152.79 per share, up 13.54%, the largest one-day increase since 2015, and the market value increase of $191 billion also created the largest single-day stock market value increase in the US market.
Also benefiting from cloud services were Microsoft and Google, with revenue growth of more than 32% for Microsoft cloud services and more than 45% for Google cloud services. Apple has also withstood severe supply chain pressures and achieved strong sales of iPhones.
At the same time, however, many of the companies that have benefited more during the pandemic have performed disappointingly after the pandemic eased.
After Netflix released its subscriber growth data, the stock price fell by more than 20 percent; fitness device Peloton will report earnings next week, and its stock price fell more than 85% in the past year.
While the tech earnings season has calmed some of investor anxiety, the fears that led to a sharp correction in tech prices are likely to persist.
According to the Financial Times, Youssef Squali, an analyst at Trust Financial Group, said tech stocks are likely to remain volatile in the first half of the year due to some of the headwinds investors are worried about, such as supply chain pressures, persistent labor shortages and the risk of currency tightening.
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