What The Stock Selloff Tells Us About The Future of Tech
There’s good reason to take note of what has changed
The past three months have not been kind to large public technology companies. Amid crescendos of criticism about monopolistic power, these companies saw their market value plummet. The rampant selling has leveled off, at least for the moment, so it’s an opportune time to ask: What comes next?
This was hardly the first drop in these firms’ share prices, and it won't be the last. But there’s good reason to think that this is more than just a periodic market correction. It signals a recognition that these companies are maturing, face new challenges from within, from each other, from shifting macroeconomic winds, and from regulators. The massive run-up in share prices this summer may not have been a last hurrah, but it’s likely that it will mark the end of this latest euphoria stage.
During the summer, tech investors—especially shareholders in the leading “FAANG” companies (Facebook, Apple, Amazon, Netflix and Google)—were feeling flush, as were those companies themselves. (Even Facebook, mired in a cascade of bad press over repeated missteps, reached an all-time high in July.) Netflix stock was up 140 percent from December 2017 to its summer peak. Apple was the first trillion-dollar US-listed company, and Amazon followed quickly. Behind the behemoths were a host of smaller companies (each pretty large), such as Salesforce and Nvidia, each up more than 100 percent for the year.
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