They expect technology to drop by more than 10%: what are the reasons

They expect technology to drop by more than 10%: what are the reasons

More than two-thirds of the 914 polled by MLIV Pulse think so The technology company’s profits will disappoint the market throughout 2022. Advertisers risk cutting spending as the global economy struggles, while streaming services face a mass influx of price-sensitive subscribers as consumers tighten their belts.

These two components respond to Recession fears Some investors see the face of persistently high interest rates, which seek to achieve the goal of curbing inflation, but could generate a freeze in economic activity due to the increased cost of financing.

besides inflationwhich is still present in many countries despite their monetary policies, is adding pressure on the cost of living of citizens, especially in Europe, which is going through historical price levels that have led to European Central Bank We note that there will be a new increase in prices: the head of the entity said that “the situation will get worse before it starts to improve”, Christine Lagarde In an appearance before the European Parliament. They also expect prices on the continent to remain above 2% in 2024, driven by energy and food.

The The Nasdaq 100 is down 31% so far this year, wiping out trillions of dollars from market value, as investors reassess the post-pandemic value of many business models. Retailers like Amazon has found that some of its responses to the Covid-19 pandemic, as the huge investments in warehouses and workers in product packaging return to hit them. FedEx, one of the major US logistics companies, has warned of a freeze in activity due to lower demand.

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Apple said it will increase the price of your App Store purchases in Asia and countries that use euroWhere the value of foreign currencies in relation to the dollar collapses. Microsoft It lowered its forecast due to currency strength in June. Sony Investors have warned of the impact of the global economic slowdown, especially in Europe, and the negative effects of a strong dollar on its financial results.

Technology earnings are expected to lag behind the S&P 500 in the third and fourth quarters. IT stocks expected to fall 6.6% in the third quarter, compared with a 3.2% gain for the broader S&P 500 index, according to data from Bloomberg Intelligence. The 12-month Nasdaq 100 stock index futures are down about 2.9% since June 1, compared to a 0.8% drop for the S&P 500.

Individual and professional investors too Guitar in Metaverse. more than 70% of the respondents From MLIV Pulse said that They knew what the metaverse was, but it wouldn’t change the way they interact With people and companies in the next two years. The sentiment doesn’t fit the way Mark Zuckerberg described the potential of the metaverse as “the next frontier” when he changed his company name from Meta (Facebook).

The company said investments in Reality Labs, the division that makes the devices, cut operating profit by $10 billion in 2021. Several tech companies, big and small, have big ambitions for the company. metaverse. However, despite the promises of industry leaders, toResponders to MLIV are unenthusiastic about its potential.

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On the plus side, it’s likely that Tech companies focused on sustainable and energy-efficient products are benefiting from the energy crisis unprecedented in the aftermath of the Russian invasion of Ukraine. After Russia imposed restrictions on natural gas supplies to heavily dependent neighboring countries, electricity prices soared to record levels and governments face potential economic collapse. In the case of Europe, the impact is particularly profound, and governments are promoting energy-saving measures while trying to lower the cost of energy on the cost of living of citizens by freezing tariffs for consumers or industries.

for investors, High electricity bills and fuel shortages are driving the development of environmentally friendly solutions. 63% of those surveyed said they believed the oil and gas crisis would encourage the development of sustainable electronics. “If we invest more in energy efficiency and invest more in renewable energy, we will be in a better position,” he said. Rachel Kate, Dean of Fletcher College at Tufts University, in a Bloomberg TV interview.

โ€œThe nearly fivefold increase in gas prices in Europe over the past 12 months is providing a good tailwind for clean energy equipment providers with companies like SolarEdge or Enphase on track to increase sales by more than 50% this year,โ€ Clean Energy Analyst Rob Barnett.

A third of those surveyed said so Planned to increase their exposure to tech stocks, just under a third said they would cut it and the rest said they would stay stable for the next six months. Technology remains attractive in some measures, such as share price ratio Stream Compared to an average of 10 years, while companies like Apple remain great cash generators. Technology remains the largest sector in the S&P 500, accounting for approximately 27% of the index.

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