Tech Stocks Plunge Amid Inflation Fears

Strategic Insights -

As inflation measures hit their highest levels in a decade, tech investors are taking no chances, dumping stocks sensitive to interest rate increases. The Nasdaq Composite has fallen 5.2% from its April 26 peak, with Apple, Facebook, and Microsoft leading the downturn.

Key Takeaways:

  • Citigroup downgraded Alphabet and Facebook to neutral from buy, with price targets unchanged at $2,415 and $320 respectively.
  • Jim Cramer, founder of TheStreet, believes tech stocks will rebound when the economy cools down, advising investors to keep a diversified portfolio and hold onto FAANG stocks.
  • Apple's App Store stopped over $1.5 billion in potentially fraudulent transactions in 2020, rejecting or removing nearly 2 million problematic new apps and app updates.
  • Amazon scored a legal victory in a $303 million EU tax case, with shares off 1.1% at $3,188.
  • Alphabet plans to double the number of staffers working on AI ethics in the coming years, with shares recently trading at $2,275.05.
  • Facebook and Alphabet are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio.
  • TheStreet Quant Ratings rates Apple, Amazon, Microsoft, and Alphabet as Buys, with Facebook and Netflix rated as Buys, and Zoom Video and Peloton rated as Sells.

Statistics:

  • Nasdaq Composite has fallen 5.2% from its April 26 peak.
  • Apple shares are down 6.3% in 2021.
  • Amazon shares are up just 1% for the year.
  • Alphabet's Google plans to double the number of staffers working on AI ethics in the coming years.
  • Citigroup's price targets for Alphabet and Facebook are $2,415 and $320 respectively.
  • Over $1.5 billion in potentially fraudulent transactions were stopped by the App Store in 2020.

Sources:

  • The Street (https://www.thestreet.com/investing/nasdaq-futures-slump-as-tech-rout-intensifies-on-inflation-fears)
  • Citigroup (https://www.thestreet.com/investing/alaphabet-facebook-downgraded-at-citigroup-to-neutral)
  • TheStreet's Mad Money (https://www.thestreet.com/jim-cramer/cramers-mad-money-recap-may-5)
  • The Wall Street Journal (https://www.wsj.com/articles/pentagon-reconsiders-jedi-cloud-contract-amazon-com-11590358000)