Mark Zuckerberg-led firm saw $200 bn in market cap wiped out
Tech stocks staged a tentative rebound across financial markets on Friday as stellar results from Amazon.com Inc. convinced traders not to give up on a sector weakened by a global monetary tightening cycle and the historic crash of Facebook owner Meta.
The company, led by Chief Executive Mark Zuckerberg, saw over $200 billion of its market value wiped out after it issued a dismal forecast, representing the biggest single-day slide for a U.S. company.
Meta Platforms Inc.’s sell-off spilled over to other listed tech companies, dragging Wall Street deep into the red, before Amazon’s convincing earnings beat after the market close on Thursday changed the mood.
Inspired by the results of the tech giant, Asian equities rose about 1% and Amazon’s shares listed in Frankfurt were up 12%. Shares of social media platform Snap Inc. were upmore than 50% in pre-market trading, after tumbling by a quarter in the previous session, in another sign that sentiment towards the sector was steadying.
The overnight volatility attracted retail buyers. Thursday’s net purchases of Meta’s shares by retail investors hit $231million, a 3-1/2 year high according to Vanda Research, marking it the third biggest day of net purchases since January 2014.
Mark Haefele, chief investment officer at UBS Global Wealth Management, said the big picture for the sector was far from bleak.
“Overall, the earnings outlook is still solid, with the global tech sector on track for earnings growth of around 15%,” he wrote in a morning note to clients.
“In our base case, we expect valuations to stabilise and for strong mid-teens earnings growth to be reflected in share prices over the next 12 months.”
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