Technology stocks have slumped. What investors never know is how long it will take for the inevitable sector reversal.
A list of the worst-performing technology stocks over the past month among the S&P 500 Index
SPX
and the Nasdaq 100 Index
NDX
is below.
Here’s how the 11 sectors of the S&P 500 Index have performed over the past month, excluding dividends:
|
Index
|
Price change – one month
|
Price change – 2021
|
Price change – 2020
|
Price change since end of 2019
|
|
Health Care
|
-8.1%
|
10.5%
|
11.4%
|
23.1%
|
|
Real Estate
|
-7.6%
|
23.4%
|
-5.2%
|
17.0%
|
|
Information Technology
|
-7.1%
|
13.4%
|
42.2%
|
61.3%
|
|
Communication Services
|
-6.9%
|
20.3%
|
22.2%
|
47.0%
|
|
Utilities
|
-6.4%
|
3.1%
|
-2.8%
|
0.2%
|
|
Materials
|
-6.0%
|
10.2%
|
18.1%
|
30.2%
|
|
Industrials
|
-5.4%
|
11.3%
|
9.0%
|
21.3%
|
|
Consumer Staples
|
-5.4%
|
2.5%
|
7.6%
|
10.3%
|
|
Consumer Discretionary
|
-3.0%
|
9.3%
|
32.1%
|
44.3%
|
|
Financials
|
-0.2%
|
28.4%
|
-4.1%
|
23.2%
|
|
Energy
|
14.2%
|
45.2%
|
-37.3%
|
-9.0%
|
|
S&P 500 Index
|
-5.2%
|
14.5%
|
16.3%
|
33.1%
|
|
Source: FactSet
|
All in all, 2021 has been a fine year for stock market performance, especially when considering that it has followed what turned out to be a good 2020 for most sectors. The technology sector was the third-worst-performing sector from Sept. 3 through Oct. 4, but it has been the clear leader from the end of 2019 through the Covid-19 pandemic.
Wedbush analyst Dan Ives attributed the pullback in technology stocks to the fear of rising interest rates and concern over growth-stock valuations in a note to clients on Oct. 5. He went on to predict the pressure on tech stocks would be “short-lived” and that the sector would be up 10% from here through the end of 2021.
“[T]he tech growth stories are being massively underestimated by the Street in
our opinion with 3Q earnings a major positive catalyst for the tech sector looking
ahead,” Ives wrote.
The overwhelming tendency for companies reporting quarterly results to beat analysts’ consensus estimates may well turn the analyst’s prediction into reality in only a few weeks.
Ives sees a “multitrillion opportunity for the next decade” as the digital transformation of multiple industries continues. His favorite investments include Apple Inc.
AAPL
among the FAANG stocks. For plays on cloud computing, his favorites among large-cap stocks are Microsoft Corp.
MSFT
and DocuSign Inc.
DOCU.
Among large-cap companies poised for the best growth as cybersecurity threats are dealt with, Ives’s top recommendations are Zscaler Inc.
ZS,
Palo Alto Networks Inc.
PANW
and Fortinet Inc.
FTNT.
Biggest large-cap tech drops over the past month
To list tech stocks, we began with the S&P 500 information technology sector and then added tech-oriented names in other sectors, such as Facebook Inc.
FB,
Twitter Inc.
TWTR
and videogame developers in the communications sector and Amazon.com Inc.
AMZN
in the consumer discretionary sector. We then added tech companies in the Nasdaq-100 that aren’t included in the S&P 500.
From this expanded list of 105 tech stocks, here are the 20 worst performers from Sept. 3 through Oct. 4:
|
Company
|
Price change – one month
|
Price change – 2021 through Oct. 4
|
Decline from 52-week high
|
Date of 52-week high
|
DocuSign Inc.
DOCU
|
-20%
|
11%
|
-22%
|
08/10/2021
|
MercadoLibre Inc.
MELI
|
-18%
|
-5%
|
-21%
|
01/21/2021
|
Okta Inc. Class A
OKTA
|
-17%
|
-12%
|
-23%
|
02/12/2021
|
Pinduoduo Inc. ADR Class A
PDD
|
-17%
|
-52%
|
-60%
|
02/16/2021
|
Enphase Energy Inc.
ENPH
|
-17%
|
-17%
|
-37%
|
02/10/2021
|
Peloton Interactive Inc. Class A
PTON
|
-16%
|
-46%
|
-52%
|
01/14/2021
|
Adobe Inc.
ADBE
|
-16%
|
12%
|
-17%
|
09/03/2021
|
Zebra Technologies Corp. Class A
ZBRA
|
-15%
|
31%
|
-16%
|
09/03/2021
|
Trimble Inc.
TRMB
|
-14%
|
22%
|
-16%
|
08/30/2021
|
CrowdStrike Holdings Inc. Class A
CRWD
|
-14%
|
13%
|
-17%
|
08/30/2021
|
Synopsys Inc.
SNPS
|
-14%
|
12%
|
-15%
|
09/03/2021
|
Nvidia Corp.
NVDA
|
-14%
|
51%
|
-14%
|
08/30/2021
|
Facebook Inc. Class A
FB
|
-13%
|
19%
|
-15%
|
09/01/2021
|
JD.com Inc. ADR Class A
JD
|
-13%
|
-21%
|
-36%
|
02/17/2021
|
Zoom Video Communications Inc. Class A
ZM
|
-13%
|
-23%
|
-56%
|
10/19/2020
|
Skyworks Solutions Inc.
SWKS
|
-13%
|
4%
|
-22%
|
04/29/2021
|
Qualcomm Inc.
QCOM
|
-12%
|
-17%
|
-25%
|
01/20/2021
|
IPG Photonics Corp.
IPGP
|
-12%
|
-32%
|
-42%
|
01/19/2021
|
Teradyne Inc.
TER
|
-12%
|
-11%
|
-27%
|
02/16/2021
|
PayPal Holdings Inc.
PYPL
|
-12%
|
9%
|
-18%
|
07/26/2021
|
|
Source: FactSet
|
Click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on MarketWatch quote page.
Leaving the group of 20 tech stocks in the same order, here’s a summary of opinion among Wall Street analysts polled by FactSet:
|
Company
|
Share “buy” ratings
|
Closing price – Oct. 4
|
Consensus price target
|
Implied 12-month upside potential
|
DocuSign Inc.
DOCU
|
77%
|
$246.57
|
$323.18
|
31%
|
MercadoLibre Inc.
MELI
|
77%
|
$1,592.75
|
$2,113.68
|
33%
|
Okta Inc. Class A
OKTA
|
74%
|
$224.96
|
$296.88
|
32%
|
Pinduoduo Inc. ADR Class A
PDD
|
79%
|
$85.08
|
$136.46
|
60%
|
Enphase Energy Inc.
ENPH
|
67%
|
$145.03
|
$199.29
|
37%
|
Peloton Interactive Inc. Class A
PTON
|
74%
|
$82.35
|
$129.67
|
57%
|
Adobe Inc.
ADBE
|
83%
|
$558.49
|
$710.33
|
27%
|
Zebra Technologies Corp. Class A
ZBRA
|
58%
|
$502.32
|
$593.33
|
18%
|
Trimble Inc.
TRMB
|
62%
|
$81.37
|
$94.67
|
16%
|
CrowdStrike Holdings Inc. Class A
CRWD
|
88%
|
$238.88
|
$311.83
|
31%
|
Synopsys Inc.
SNPS
|
87%
|
$289.25
|
$339.69
|
17%
|
Nvidia Corp.
NVDA
|
81%
|
$197.32
|
$233.93
|
19%
|
Facebook Inc. Class A
FB
|
76%
|
$326.23
|
$421.09
|
29%
|
JD.com Inc. ADR Class A
JD
|
94%
|
$69.41
|
$92.72
|
34%
|
Zoom Video Communications Inc. Class A
ZM
|
50%
|
$259.58
|
$350.56
|
35%
|
|
Skyworks Solutions… |
For your shopping list: These big tech stocks have dropped as much as 20% over the past month
Technology stocks have slumped. What investors never know is how long it will take for the inevitable sector reversal.
A list of the worst-performing technology stocks over the past month among the S&P 500 Index
SPX
and the Nasdaq 100 Index
NDX
is below.
Here’s how the 11 sectors of the S&P 500 Index have performed over the past month, excluding dividends:
All in all, 2021 has been a fine year for stock market performance, especially when considering that it has followed what turned out to be a good 2020 for most sectors. The technology sector was the third-worst-performing sector from Sept. 3 through Oct. 4, but it has been the clear leader from the end of 2019 through the Covid-19 pandemic.
Wedbush analyst Dan Ives attributed the pullback in technology stocks to the fear of rising interest rates and concern over growth-stock valuations in a note to clients on Oct. 5. He went on to predict the pressure on tech stocks would be “short-lived” and that the sector would be up 10% from here through the end of 2021.
“[T]he tech growth stories are being massively underestimated by the Street in
our opinion with 3Q earnings a major positive catalyst for the tech sector looking
ahead,” Ives wrote.
The overwhelming tendency for companies reporting quarterly results to beat analysts’ consensus estimates may well turn the analyst’s prediction into reality in only a few weeks.
Ives sees a “multitrillion opportunity for the next decade” as the digital transformation of multiple industries continues. His favorite investments include Apple Inc.
AAPL
among the FAANG stocks. For plays on cloud computing, his favorites among large-cap stocks are Microsoft Corp.
MSFT
and DocuSign Inc.
DOCU.
Among large-cap companies poised for the best growth as cybersecurity threats are dealt with, Ives’s top recommendations are Zscaler Inc.
ZS,
Palo Alto Networks Inc.
PANW
and Fortinet Inc.
FTNT.
Biggest large-cap tech drops over the past month
To list tech stocks, we began with the S&P 500 information technology sector and then added tech-oriented names in other sectors, such as Facebook Inc.
FB,
Twitter Inc.
TWTR
and videogame developers in the communications sector and Amazon.com Inc.
AMZN
in the consumer discretionary sector. We then added tech companies in the Nasdaq-100 that aren’t included in the S&P 500.
From this expanded list of 105 tech stocks, here are the 20 worst performers from Sept. 3 through Oct. 4:
DOCU
MELI
OKTA
PDD
ENPH
PTON
ADBE
ZBRA
TRMB
CRWD
SNPS
NVDA
FB
JD
ZM
SWKS
QCOM
IPGP
TER
PYPL
Click on the tickers for more about each company. Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on MarketWatch quote page.
Leaving the group of 20 tech stocks in the same order, here’s a summary of opinion among Wall Street analysts polled by FactSet:
DOCU
MELI
OKTA
PDD
ENPH
PTON
ADBE
ZBRA
TRMB
CRWD
SNPS
NVDA
FB
JD
ZM
Read More:For your shopping list: These big tech stocks have dropped as much as 20% over the past month
2021-10-05 14:09:00