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Big Techs: Market cap plummets and losses reach nearly $2 trillion

Big Techs is the term used to name some of the biggest technology companies on the market today, including Alphabet (parent company of Google); Amazon, Apple, Meta (responsible for Facebook, Instagram and WhatsApp), Microsoft, Netflix, Tesla and Twitter.

At the end of last year, the companies together accounted for a market value of US$ 11.35 trillion. This combined amount has plummeted in recent months, reaching a total of US$ 9.471 trillion in April. That is, a considerable drop of 16.55%, or the equivalent of US$ 1.89 trillion.

The current scenario, therefore, is quite contrary to what happened during the pandemic, a period in which the same companies had billions in profits.

The stock market indices around the world were also impacted by the fall of Big Techs – Image: Sophie Backes/Unsplash

As a direct consequence, stock market indices also suffered: in the year to date, the Dow Jones fell 7.29%, the S&P 500 retracted 10.61%, while the Nasdaq lost 18.46%.

It is worth mentioning that the latter, which recorded the biggest drop, is precisely where the vast majority of Big Techs are concentrated.

Among the main reasons that explain the fall in company values ​​are the unfolding of the war between Ukraine and Russia, which impacted the global market; inflationary pressure and the recurring lockdowns in China in the face of the pandemic that remains active.

Big Techs balance sheet

Despite the impact, not all were summarily overthrown. An example of this is Apple.

Last Thursday (28), the company reported a performance above estimates for the quarter, with record sales of iPhones (in particular, an increase of 19% in the Americas), in addition to the services division.

The company’s worldwide quarterly smartphone sales revenue reached a total of $50.6 billion, or the equivalent of a 5.5% growth compared to 2021.

With regard to services, the company recorded growth of 17%, or US$ 19.8 billion.

Netflix

Netflix was one of the Big Techs that presented the worst performance in the period – Image: freestocks/Unsplash

In contrast, Netflix was one of the worst performers. After revealing the loss of 200,000 subscribers between January and March of this year and estimating a drop of 2 million users by the end of the year, the company faced the worst day on the stock market.

On April 20, the company’s shares were 37% lower on Wall Street — the worst price in 18 years.

Jennie Li, stock strategist at XP Investimentos, explains to InfoMoney that the streaming sector is one of the most affected by inflation.

That’s because, with the decrease in people’s purchasing power, the superfluous are the first cuts from the budget — and guess what? Streaming goes far beyond the primary needs, which explains part of the big drop.

The scenario, in fact, is not favorable nor should it improve in the coming months.

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