Tech stocks slumped again on April 23, with technology companies in the S&P 500 sliding more than 0.4 percent in late afternoon trading despite rallies by IBM and Microsoft. Apple, Alphabet (Google) and Twitter shares fell, while Facebook dropped 0.26 percent.
- Microsoft (MSFT) +0.37 percent
- Apple (AAPL) -0.29 percent
- IBM (IBM) +0.66 percent
- Alphabet (GOOG) -0.51 percent
- Facebook (FB) -0.26 percent
- Twitter (TWTR) -2.16 percent
Facebook continues to struggle as its shares closed Monday at $165.84, down 0.26 percent, on middling trading volume.
Hours before the market close, billionaire fund manager Jeffrey Gundlach boldly declared that he was betting against Facebook and will short the stock because he believes it will remain under pressure amid its ongoing data-privacy scandal.
Despite the rocky past few months for the sector, some market analysts believe now is a good time to buy tech stocks.
“I do think that tech — Apple, Nvidia and some of these other ones — are probably approaching those areas right now, even ahead of earnings, where you may want to start dipping in your toes,” said Prosper Trading Academy CEO Scott Bauer, as reported by CanTech Letter. “You look at Apple and over the last 18 months, every time we see a decline like this, you just close your eyes and you buy it and it has worked out. I’m not saying that’s the best strategy in the world, but that’s certainly the trend.”
Apple stock has been battered amid weak demand for its new $999 iPhone X. In fact, sales of the iPhone X have been so dismal that some analysts believe the model will likely be discontinued.
“The simple problem with X is that it is too expensive,” Neil Campling, the co-head of technology at Mirabaud Securities, told CNBC. “Consumers are turning their backs on high-priced smartphones.”
Campling says Apple may respond to the sales slump by rolling out cheaper iPhone models that could be priced at around $500. But at this point, even that’s a gamble.
Last week, both JP Morgan and Morgan Stanley issued notes commenting on the disappointing sales figures of the new Apple iPhones.
Morgan Stanley projects that shipments of the iPhone could drop by 17 percent to 34 million in the coming months. “As was the case in the last two June quarters, we expect Apple revenue guidance to come in below current consensus estimates,” said the firm.