Netflix caught up in €1.2trn tech stock rout this year

The reversal for some of last year’s hottest stocks makes tech one of the worst-hit sectors in the S&P 500

A scene from 'Bridgerton', which has been a big hit for Netflix: The streaming service, along with other tech stocks, has had a volatile start to 2022. Picture: Liam Daniel/Netflix

Tech stocks’ volatile start to 2022 offers a stark reminder of how harshly Wall Street is punishing the former stars of the pandemic era.

One-time stay-at-home winners such as Etsy, Netflix, and PayPal are among the biggest losers in the S&P 500 Index this year. They’re part of a $1.3 trillion (€1.2trn) wipeout in market value for the Nasdaq 100 Index — a tide so strong that even mega caps Amazon and Apple are struggling to stay in the green. 

The reversal for some of 2021’s hottest stocks makes tech one of the worst-hit sectors in the S&P 500. Geopolitical tensions and supply chain hurdles have added to concerns over rising interest rates and surging bond yields, which can hurt the present value of future profits.

“The pandemic winners now have to face a situation where all Covid-related tailwinds have disappeared and the current situation facing them is of economies suffering from huge inflation which is curbing individual purchasing power and putting pressure on discretionary spending,” said Jim Dixon, a senior equity sales trader at Mirabaud Securities.

Some of that rout has turned around. Those who initially fled the sector have started to come back, enticed by discounts and the belief that some big names can continue to churn out bigger profits. 

• Bloomberg