Top technology stocks that are not doing so well in 2022

Concerns about rising inflation have caused stock market-listed technology companies around the world to have their share values collapse in the first few weeks of 2022.

The NASDAQ 100, FTSE 100, ASX 200, Dow Jones Industrial Average, and Nikkei 225 are among the world's major stock market indices that have slid downhill, and cryptocurrencies have not been left out of the slide. Technology stocks, on the other hand, have taken the brunt of it. Netflix has lost 33% of its value this year, Amazon has lost 16%, Microsoft has lost 12%, and Alphabet has lost 10%.

The NASDAQ 100 Technology index, which includes household brands such as Apple, Microsoft, and Alphabet, the parent company of Google, lost 12% of its value in the first 21 days of 2022.

Technology companies have had an exceptionally slow start to the year, owing to persistent fears about rising prices and interest rates around the world, as the COVID-19 pandemic keeps spreading.

According to Bankrate data, these are the worst performing tech stocks so far in 2022;

Company and Ticker Symbol	Performance Year-to-Date (percent)
EPAM Systems (EPAM)	-68.9%
PayPal (PYPL)	-40.6%
Zebra Technologies (ZBRA)	-30.6%
Ceridian HCM (CDAY)	-30.2%
Teradyne (TER)	-27.9%

 

PayPal is one of the companies that has been penalized by investors. On Feb. 18, the stock closed at $103.65, down 15% from its pre-pandemic high in 2020. The drop in PayPal stock has been nothing short of spectacular. Over the next 15 months, the stock more than tripled in value from its March 2020 low, as usage and revenue skyrocketed. Then, just as swiftly, the stock market crashed, wiping out billions of dollars as growth slowed.

Since its all-time high in mid-summer 2021, the digital payments expert has lost two-thirds of its value. PayPal bulls have been particularly hurt by the devastating loss. The stock market's decline over the last seven months has been twice as severe as what investors witnessed in February and March 2020.

In this new series of sell-offs, Netflix, Facebook parent Meta, and Twitter have all taken larger losses than they did in the early days of COVID.

After a terrible fourth-quarter report, shares of Facebook parent Meta Platforms (FB, $207.71) have fallen more than 38% year-to-date through Feb. 17. Changes to Apple's (AAPL) iOS privacy policies harmed Facebook's primary advertising business. Users are abandoning Meta in favor of TikTok and other competitors. To worsen the situation, the firm offered a blurry forecast and its investment of billions of dollars in the company’s metaverse project which may take nearly a decade to complete, with little to no guarantee of success. In 2022, Facebook's market value has plummeted by $356 billion, wreaking havoc on the market-cap-weighted S&P 500.

According to a Deutsche Bank note, trouble has been mounting for technology stocks as the Federal Reserve wants to remove emergency accommodation dating back to the COVID-19 crisis of 2020, in a hawkish tilt toward tightening its monetary policy amid high inflation.

In a February report, Deutsche Bank's Jim Reid, head of thematic research, wrote that this year has been "a perfect negative storm for tech." Higher nominal and real rates, as well as "a Fed that appears strongly committed" to beginning quantitative tightening in 2022, were noted by him.

Reid demonstrated how the FANG+ Index NYFANG, -2.35 percent, which tracks the stock performance of ten tech behemoths, has tracked the growth of major central banks' balance sheets while benefiting from emergency monetary intervention during the epidemic in his note.

“Unless you are an incredibly strong advocate of a completely new earnings paradigm for the largest technology companies, that coincidently have tracked unconventional monetary policy, then it is hard to argue against the notion that central bank policies have been a big contributor to an incredible run for the sector over the last 6-7 years,” Reid wrote.