Tech stocks are crashing this year, if you haven't noticed
The tech reckoning might be on its way.
Stocks for the big internet companies have fallen 11% year to date, dropping more substantially than the rest of the stock market, per a Goldman Sachs report.
SEE ALSO: Tech FANGs — Facebook, Apple, Netflix and Google — are worrying about the stock market
You May Also Like
The biggest contributors, according to Goldman, to the downswing are LinkedIn (down a whopping 49%), Netflix (down 22%), Amazon (down 21%), eBay (down 13%), and Alphabet (down 7%).
And things could have been even worse.
FANG — Facebook, Amazon, Netflix, and Alphabet (nee Google), the group of the best-performing tech stocks — outperformed, thanks to the share price of its crown jewel Facebook, which stayed flat while its colleagues faltered.
Take away FANG, and the tech industry would have suffered a 15% dip.
It's been a winter of discontent for Wall Street, with the stock market ringing in the New Year by tanking. But that's likely not the reason tech companies are feeling the chill.
Many of the tech giants reported better-than-expected earnings reports, and investors might question whether it's worth throwing money into companies that likely won't grow much more in the short-term.
Goldman analysts noted that 16 out of 28 tech companies that reported Q4 earnings have traded down in the months since.
The exceptions include, of course, FANG HBIC Facebook and lower-cap companies like GrubHub and TripAdviser, which investors liked because of gains in revenue and well-paced margin expansion, according to Goldman.
And what's happening on Wall Street seems to be reflective of reluctant investors all around. The last quarter of 2014 saw fewer investors pouring venture capital money into tech companies.
While venture capital investments peaked to $59 billion in 2015, Q4 only saw VC investments of about $11.3 — the first decline since 2Q13.
It seems that investors just aren't confident right now that these once stock market strongholds are are worth as much as they once thought.
But while Goldman analysts expect that most of the players in the tech industry will end up outperforming expectations by year's end, this might be one of the first indications that investors think it's time for tech unicorns to come back down to earth.
Have something to add to this story? Share it in the comments.
