After the bloodbath on Wall Street yesterday on technology stocks, the decline of that compartment, even excessively valued, could continue 15 years after the bursting of the bubble in internet stocks.
Yesterday on Wall Street, it is they who declined the most. The Nasdaq Composite, the high-tech index has plunged by as much as 3.4%, against “only” 2.5% in the benchmark index S & P 500, representative of the entire US coast. In particular, the values of the Nasdaq Biotech lost an average of 5.3%.
This Berezina technology stocks has occurred in the absence of real catalysts, with the exception of the deterioration of the sector by Morgan Stanley, which now recommends to underweight. It is above its high valuation worried investors after stratospheric surge in the hollow between 2009 and the peak of 2015, the Nasdaq has been multiplied by 4 over the period. Even after the recent coup de torchon, listed companies in the index is still paying on average 28 times their earnings, against “only” 17 times to those of the S & P 500. The extreme violence of the stall Nasdaq (-10% in ten days!) supports the idea of a bubble now bursting on US technology stocks.
And that, especially since the fall indiscriminately key heavyweights from the coast, the well-established positions and generating profits imposing, such as “GAFA” (Google (renamed Alphabet), Apple, Facebook, Amazon) as Companies with more uncertain prospects, such as the electric car manufacturer Tesla or the social network Twitter, both in deficit.
Even after the fall in alphabet is still paying 26 times expected earnings for this year, Amazon and Facebook 54 105! Excessive levels, which suggest that the correction is far from over. As for Apple, its valuation more affordable at first sight (10 times) in perspective, due to fears about its prospects in smartphones, facing the rise of China’s Huawei and Xiaomi.
The overvaluation of US technology stocks is even more untenable than the disappointments multiply. Latest, the difficulties Gopro, mini camera manufacturer, which announced results well below expectations and announced cuts in its workforce (7% of total). The course is largely fell under the IPO price.
The panic on US technology stocks quickly crossed the Atlantic. At the Paris Bourse, many values of the compartment, including medical or biotech, are among the largest declines in the deferred settlement service (SRD) as DBV Technologies (DBV-€ 50.86 -9.24%), Stentys (STNT-5,08 € -8.47%) and Transgene (TNG-€ 3.18 -3.93%).