Apple, Amazon and others soared through the pandemic as their businesses boomed despite the recession. The coronavirus accelerated a shift to online life that’s benefited them, and a pile-on of investors into Big Tech sent their share prices soaring to levels that critics said were overvalued.
Apple had a nearly irrepressible run this summer where it rose in 12 out of 13 weeks. Zoom Video Communications surged above $450 per share earlier this month after starting the year at less than $70.
That all came to an abrupt halt last week. Worries that the stocks had gotten overheated helped send the S&P 500 to its worst three-day run in nearly three months, and the Nasdaq composite slid 10%. Tech stocks recovered a bit on Wednesday, and they seemed to regain their stride Thursday morning, only for an afternoon swoon to batter them again.
On Friday, tech stocks again swung from gains to losses. The fluctuations came even after Oracle reported stronger profit for its latest quarter than analysts expected. After leaping as much as 7.9% in the morning, its stock slipped 0.6%.
Big Tech and the high-growth area of the stock market “just got ahead of itself,” said Jason Pride, chief investment officer of private wealth at Glenmede. “It doesn’t matter how it got there, it matters that it got there and now we’re kind of deflating that overvaluation a little bit.”
After rising as much as 1.5% shortly after trading began, Apple fell back to a loss of 1.3%. It dropped 7.4% over the week, its worst since March. Movements for it and other Big Tech stocks matter more than ever for broad market indexes because their immense size means they can influence the S&P 500 almost by themselves. Five Big Tech companies make up nearly 23% of the