Devalued tech stocks are starting to look interesting
2022 has not been kind to the stock market so far. No one is safe, even the world’s largest tech companies have seen their fair share of stock devaluation. As of the 11th of May, Apple (AAPL) is down 15.11%. Google (GOOG) down 21.02%. Amazon (AMZN) down 36.12%. Meta platforms Inc (FB) down 41.62%. Microsoft (MSFT) down 19.49%.
All these companies have seen a tremendous rise in their stock values since the beginning of the pandemic. Some say that they have clearly been overvalued. And yet, a lot of other companies has fared much worse in 2022. They are usually grouped together as tech companies while there are obvious differences between two companies such as Apple and Meta. This leads me to my point when it comes to investing in companies: don’t just follow technical analysis or trends but look at the specific company before deciding to invest. Do you believe in the company’s business model? Would you use their product or service? Is it something you would recommend others? I would not invest in a company that I did not believe in. As history shows, even companies with a fantastic product can fall on bad times based on bad decisions or incompetent management or even outside factors that the company cannot affect. After taking these questions into consideration it is recommended to analyze the stock from a technical and fundamental standpoint as well before making an investment decision.
The question is if now is the time to go in and invest in these companies. It is impossible to try to hit the bottom as no one can predict the specific time, especially with all different parameters affecting the market right now with the ongoing war in Ukraine, inflation and rising interest rates. How the Fed chose to go forward with the increasing interest rates will definitely affect how the big tech stocks values develop. If the interest rate curve becomes too aggressive it will most likely affect these stocks in a negative way according to Niche Business News. The only thing we can say for sure is that it is much cheaper to buy these stocks today than just a few months ago. So, looking at the long term it might be profitable to start investing now if the plan is to keep the stocks for a long time. That said, these stocks can still dip lower before turning the tide and even then a profit is never guaranteed.
