Prior to November 2021, most investors and pundits believed that the Street’s favorite large-cap tech stocks were mostly or completely immune to major downturns. Many institutional investors loaded up on these names and others like them as a result.
Now everything has changed. Many of the old favorites have gone down. The Street’s Big Tech darlings are not the safe haven from downturns that they used to be.
Although I think the economy will avoid a recession and inflation will ease going forward, I believe that some of these former Big Tech favorites will struggle in the medium term. I advise investors to sell their shares of these tech stocks.
The person is ticker.
The company is
The current price is current.
AAPL is a company.
Apple products.
$138.46
It’s TSLA.
There is a car calledTesla.
$750.69 is what it is.
The TWTR is TWTR.
It’s on the social media site. It’s on the social networking site.
$43.47
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It’s Apple.
There are a number of tough problems facing the hardware giant. At a time when the Street is weary of tech stocks with high valuations, Apple is seen as being in that category.
The forward price-to-earnings, price-to-book and price-to-sales ratios of AAPL stock are not very different. The valuations of a rapidly growing tech company are very attractive. The valuation of the stock is steep for a tech giant that doesn’t seem to have any exciting products on the horizon.
China is one of Apple’s most important geographic regions because of its slowing economic growth.
Consumers are shifting a lot of their spending from goods to services. Apple earns most of its profits from tech hardware, so it is not a good situation.
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There is a company called “Tesla.”
The electric vehicle maker is facing many problems. Musk became an enemy of left-wing Americans because he advocated for free speech on the platform and put himself in a position to change it. Musk’s recent criticism of the Democrats in general and the Biden administration in particular did not help his image on the left.
TSLA stock was recently removed from the S&P 500’s ESG Index, as Musk andTesla have become the target of multiple investigations. If Musk succeeds in taking control of Twitter, expect him to continue to be a target for regulators and large organizations that don’t like his political views. Even if the deal doesn’t go through, Musk and his company could still be targets for those groups.
In Western countries, consumers upset with Musk may decide to avoid buying electric vehicles, while China’s economic downturn could hurt the company.
The forward P/E ratio of TSLA stock is an elevated 56x, and the automaker could be hurt by supply chain issues and the shift of consumer spending to services from goods.
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TWTR is a social networking website.
TWTR stock is likely to be surrounded by uncertainty for some time after Musk floated the idea of cutting his takeover bid.
No one knows if Musk will actually buy the company, and no one knows how much he will end up paying if the deal goes through. As a result of that situation, the shares of the company are likely to go down in value.
In a previous column, I pointed out that President Donald Trump’s Truth Social app was facing increasing competition from the right side of the political spectrum. The parent company of the app has agreed to merge.
The company is going to be hurt by anger on the left and competition from the right if Musk acquires it.
Larry Ramer had a long position in the stock. The author’s opinions are subject to the Investor Place.com Publishing Guidelines.
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