Ongoing pandemic costs, increased stimulus, and ever-mounting debt are intensifying investor worries about inflation.
Privacy issues, antitrust investigations, human rights violation allegations, and the threat of being broken up and sold for parts. These are but a few of the threats facing Big Tech giants today.
But with these stocks plummeting last night, perhaps investors should take a breath!
When you see companies soaring into multi-trillion-dollar valuations, it’s natural to start throwing terms such as ‘overvalued’ around. However, days such as yesterday where the tech-heavy Nasdaq pulls back 2.5% thanks to declines in Big Tech can set alarm bells ringing.
- Apple fell 3%.
- Microsoft fell 2.7%.
- Amazon fell 2.1%.
- Alphabet fell 1.7%.
Ooph, that’s gotta’ hurt.
The losses come as investors grow wary of soaring valuations amidst an ongoing pandemic, while the U.S. nears agreement on a $1.9 trillion COVID relief package. The bill’s passage would likely intensify inflation in the coming years as the trillions of dollars make their way through the U.S. financial system.
This is entirely possible, but something that the long-term investor should not be worrying about in relation to their portfolio. Instead of panic selling due to a Big Tech sell-off, think about the long-term potential.
Apple is the leading smartphone maker on the planet and just reported record revenue. Microsoft is the leading software company in the world. Amazon just recorded its best-ever quarter and may well be on its way towards world domination. Alphabet is still the world’s leading search and advertising company.
Each Big Tech company has plenty of bull and bear cases going for them, but short-term volatility is definitely not one of them. Always remember to go back to the fundamentals of long-term investing before panicking, or worse, selling shares on days like today.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.