Macroaxis Private Story

The tech stock market is one of the most interesting and lucrative to explore - yet recent events have proven it's also one of the most volatile. Investors have collectively lost billions of dollars over the last few months, whereas others view it as a diamond in the rough. Will you take a dip into the tech stock market?

Published over two months ago
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Why Are Tech Stocks Dropping, and Is It an Opportunity?

Tech stocks are in the midst of a downward trend – does that mean an opportunity is on the horizon for one of the biggest industries? Click here to learn more.

Why Are Tech Stocks Dropping, and Is It an Opportunity?

The tech stock market is experiencing a powerful rotation, forcing many investors to jump ship – but any savvy-minded investor will know that a downward trend is a potential opportunity to jump aboard.

The tech industry is a massive, rapidly evolving industry with a global value of $5.2 trillion, with nearly unmatched potential for investors – so why is it experiencing a decline? Read on to find out.

The Beginning Of A Volatile Journey

The start of 2022 was a highly volatile year for Wall Street. Stock market investment platforms clearly showed the beginning of a potential bear market – the tech-heavy Nasdaq composite only just managed to escape its worst start to a year in history, and the S&P 500 recorded its weakest performance since 2009.

But that wasn't the beginning. The decline started in the last quarter of 2021, attributed to stretched valuations, and the pandemic fuelled rising interest rates that ended a long stint of technology stock outperformance.

An overvalued market leading into the year coupled with investors having to consider rising inflation rates, interest rates, a reduction in economic growth, and a stricter monetary policy from the federal reserve brings us to where we are today – in bear market territory.

Meta has undoubtedly fared worse. At the end of February, Meta (FB-2.47%) recorded a loss of 39% since the beginning of the year, wiping out a quarter of its total value. Apple (AAPL), Tesla (TSLA), and even Netflix (NFLX) have also felt the effects of a deeply damaging rotation in the tech stock market.

Does This Open The Door For Opportunity?

One man's trash is another man's treasure, as the saying goes. But the tech-heavy NASDAQ composite shows no signs of reverting to a bullish market – does that open the door for opportunity? According to the Bank of America, institutional investors haven't held such a small proportion of tech shares in over a decade; after investors dumped billions of dollars worth of shares in the last quarter of 2021 and the beginning of 2022. Sources also found that tech funds are underweighted by 0.8% compared to their S&P 500 counterparts.

It's easy to run for the hills when watching the red screens and even more so when the data shows a shock sell-off. But experts predict this is the best time to focus on defensive tech stocks with a significant free cash flow and the oversold stalwart names - Yahoo Finance reports.

The cybersecurity tech industry, for example, is likely to experience a boom as reports of cyber attacks reach 2,200. Similarly, the struggling Meta stock should take a turn for the better based on previous trends from the former Facebook stock that showed resilience and the ability to bounce back. Thus, the shocking tech stock lows could be creating the perfect negative storm for investors.

The Tech Stocks Predicted To Bounce Back

Based on research collected from multiple trading platforms and investment articles, below are four tech stocks predicted to bounce back:

  • Meta (FB)
  • Xilinx (XNLX)
  • Salesforce (CRM)
  • Lemonade (LMND)

Predictions are merely predictions in such a volatile market. Thus, it's essential to make your own informed decisions on what tech stocks to buy rather than taking concrete advice from sources.

The tech stock market is one of the most interesting and lucrative to explore - yet recent events have proven it's also one of the most volatile. Investors have collectively lost billions of dollars over the last few months, whereas others view it as a diamond in the rough. Will you take a dip into the tech stock market?

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Please refer to our Terms of Use for any information regarding our disclosure principles.

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