Investors sold off more shares in the largest technology companies on Monday, deepening concerns that the high-value industry is a bubble.
Shares in Apple, Amazon, Facebook, Google and Microsoft were all down when markets opened on Monday, continuing a sell-off that started on Friday.
Apple suffered the biggest drop yesterday, continuing a trend that started before the weekend. The iPhone giant was down 2.5pc, following a 4pc decline on Friday, which slashed $30bn from the company’s value. Brokers downgraded the company for a second time in two weeks.
The news reflects fears that technology companies are overvalued. Robert Bouroujerdi, chief investment officer at Goldman Sachs, published a report last week that warned of increasing risks of the firms.
“Five companies poised to dominate disruption – Facebook, Amazon, Apple, Microsoft and Alphabet – have added a total of $600m (£474m) of market cap this year, or the equivalent gross domestic product of Hong Kong and South Africa combined,” said Bouroujerdi. “Parallels to the ‘nifty-fifty’ and 1999 to 2000 are growing as their performance is even more pronounced on a risk-adjusted basis.”
Analysts said the news is worrying, but are assured the companies will recover from the dip.
“The big US tech stocks have gone stratospheric this year and investors are querying if there is anything left in the tank,” said Neil Wilson, senior market analyst at ETX Capital. “At the moment it looks like it’s just a pause that allows for some profit taking before another push higher. But it certainly has the potential to rattle markets if it continues.”
The five companies had been performing well up until June 7, with Apple, Facebook and Microsoft up as much as 35pc and Google up 26pc.
The rapid drop wiped billions of dollars from the net worth of founders including Mark Zuckerberg, Bill Gates and Jeff Bezos, who had been poised to become the richest person in the world. Bezos lost $2.6bn from his worth, while Zuckerberg lost $2bn.
European stocks followed the US lead and the Stoxx Europe 600 Technology index was down 3.7pc. Other technology companies were also swept up in the downturn, including Netflix, Intel and Tesla.
Featured Image: Apple