It is unlikely that technology investors will ignore the pain in this sector. Even the S&P 500 tech giants are being dragged down.
Twelve stocks of information technology at S&P 1500, including members of S&P 500 PayPal (PYPL), Enphase Energy (ENPH) and Adobe (ADBE), have now dropped by 60% or more since the time Nasdaq Composite makes a climax and begins to fall into the bear market. Nov. 20, 2021. Following the Nasdaq 2% decline on Monday, the tech-heavy index is now out at 21.6% on the bear - and it is getting worse.
Smaller firms bear the brunt of the downfall. But seeing tech giants increasingly crash, too, underscores that this is a problem for the entire S&P 500 industry.
"It raises a serious question ... that millions of investors (including me) are facing this: If you are unlucky enough to own some of these stocks and suffer huge losses - in most cases, more than 50% in the last four months - what should you do?" Said Whitney Tilson, is a strategist at Empire Financial Research.
The stock pain of the S&P 500 Tech is getting worse
The rise in Tech shares during the bull market was positive. But now your postponement is almost surprising.
The Nasdaq Composite Index is declining rapidly. It is now over a 20% drop from the top to be placed in the bear market place. This year alone, Nasdaq is down 19.6%. And that comes from some famous technology ETFs, too.
Technology Select Sector SPDR ETF (XLK) is now down 18.7% this year. And that despite the slowdown in the largest stocks of the S&P 500 that fell below the small percentage. IShares U.S. Extensive Technology ETF (IYW) has dropped by more than 20% this year. And it dropped by more than 22% at Nasdaq's Nov. 19. Also find out: About two-thirds of the 199 S&P 1500 technology companies are now in the 10% correction position - or worse.
But what kind of tech stocks are paying the most for this bear?
The Worst Shares of Your Own Technology: A.I. A headache
If you are looking for the worst place to be in technology investment during this bear, do not look far beyond Cerence.
The medium-sized maker of smart-intelligence technology used in mobile systems is a disaster for this bear. Shares dropped by more than 70% in the Nasdaq bear. That's a big drop in any other stock in the S&P 1500. Investors are starting to fall back on the high prices they were paying for technology, especially if the highest speculation does not pay.
Analysts expect Cerence's profit to drop by more than 23% this year to $ 1.94 a share. Meanwhile, the company's revenue is expected to drop by 4% to $ 371 million this year. That should not be the only reason for investors who want higher interest rates.
Injuries With S&P 500 Tech Stocks, Also
But also, what is remarkable now is that the pain of tech is spreading to the giants of the S&P 500, too.
PayPal, an expert at the S&P 500, is an example. Shares of a digital payroll company have now dropped by 50% in the Nasdaq bear market. They have dropped by almost 49% this year. And there is no reason to see any basic support. Analysts now expect the company's profits to grow by 1% this year to $ 4.65 per share.
And the list of S&P 500 hit stocks is growing as sales grow. Unique energy company Enphase, now part of the S&P 500 technology sector, has now dropped by 41% from the Nasdaq bear. And Adobe, one of the stars for its software program, has closed more than 40% off the top of the Nasdaq. The market value of the company increased to only $ 196 billion, making it behind slow-growing consumer companies such as Coca-Cola (KO) and Costco Wholesale (COST).
With so much pain in the S&P 500 tech, nervous investors may wonder how bad it could be?
With so much pain in the S&P 500 tech, nervous investors may wonder how bad it could be?
"While some of the most popular growing stocks are trading at very low multiples, nothing can stop them from falling sharply," Tilson said.
The Worst Shares In This Tech Bear To date
S&P 1500 stocks have dropped by 40% or more from Nasdaq's Nov. 19, 2021 high.
| Company | Symbol | Index | Stock % drop in bear |
|---|---|---|---|
| Cerence | (CRNC) | S&P 400 (mid-sized) | -70.9% |
| EPAM | (EPAM) | S&P 500 (large) | -66.9 |
| 8x8 | (EGHT) | S&P 600 (small) | -50.2 |
| PayPal | (PYPL) | S&P 500 | -50.0 |
| LivePerson | (LPSN) | S&P 600 | -49.9 |
| Ceridian HCM Holding | (CDAY) | S&P 500 | -48.3 |
| Digital Turbine | (APPS) | S&P 400 | -48.0 |
| 3D Systems | (DDD) | S&P 600 | -43.8 |
| Calix | (CALX) | S&P 400 | -42.8 |
| Enphase Energy | (ENPH) | S&P 500 | -41.1 |
| Autodesk | (ADSK) | S&P 500 | -41.5 |
| Adobe | (ADBE) | S&P 500 | -40.2 |
