Tech stocks have tumbled around the world, led by a continued slump in Apple’s share price.
The Cupertino-based firm, which reached a trillion dollar valuation earlier this year, has plunged into a bear market due to fears over iPhone production.
A bear market is generally held to be one in which a stock’s value declines by 20 per cent or more from a 52-week high, or over a period of two months.
The share price fell 4 per cent on Monday after reports that Apple had cut production orders for its three newest iPhones, and the stock was down 4.5 per cent in early trading on Tuesday.
Apple’s decline brought the other so-called FAANG stocks (Facebook, Amazon, Apple, Netflix and Google) down too - altogether, these companies have lost more than $1 trillion (£780bn) in market cap from the point of their highest valuation in the last year.
Fiona Cincotta, senior market analyst at City Index, said the sliding share prices showed how the FAANG firms can be victims of their own successes.
“As much as the companies could do no wrong when investors were positively inclined towards them, Amazon, Netflix, Facebook and Microsoft are now selling off much quicker than other stocks,” she said.
“Part of the problem is that investors no longer expect an average growth in profit; if the sales are not double digit and spectacular – as is the case in with the latest iPhone - the disappointment quickly translates into a selloff in shares.
“Given how high these stocks have risen over the last year the selloff then triggers chart signals which only provoke more and faster selling.”
Tech firms in Europe have felt the pain of their US counterparts, with the European Stoxx 600 tech index dropping on Tuesday to hit its lowest level since February 2017.
