It was just recently that the Nasdaq set a series of new all-time highs, fueled by strong earnings expectations for leading high-profile tech companies like the FAANG stocks — Facebook (Nasdaq: FB), Amazon.com (Nasdaq: AMZN), Apple (Nasdaq: AAPL), (Netflix (Nasdaq: NFLX) and Alphabet/Google (NASDAQ: GOOG).
However, in the last week, big disappointments from the likes of Facebook, Twitter (NYSE: TWTR), Intel (Nasdaq: INTC) and PayPal Holdings (Nasdaq: PYPL) caused the Nasdaq shed over 300 points in the span of just three days. Thankfully, the hemorrhaging in the tech-rich index abated after strong earnings from Apple, which just became the first company to officially reach a $1 trillion market capitalization.
Appleā??s strength is causing some renewed market optimism, and this optimism has spilled over into other big-cap tech stocks that were summarily hit with last weekā??s sector sell-off. Trusted names in the sector have all recouped a good portion of their short-term declines.
Unfortunately, the high-tech blow off shows how vulnerable investor sentiment can be when all the earnings stars donā??t line up just right. I expect that volatility will remain elevated for the tech space during August.
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