Meta facebook stock price: Is Meta becoming a valuable stock after the crash?

It was a week of polar extremes for Big Tech, which saw stomach swings that sparked the craziest volatility since the pandemic shut down the US economy in 2020.

It’s hard to overstate the madness of the past five days: The Nasdaq 100 Index, which includes some of the world’s tech giants, had its best week since December, even after Facebook’s parent company, Meta Platforms Inc. , posted the worst single-day drop in market value. in stock market history, plunging it into value territory.

But it wasn’t a train wreck for tech stocks this week: Shares of Amazon.com Inc. soared 14% on Friday on strong cloud growth, in the biggest single-day gain of the market capitalization of the history of the United States. On Wednesday, Alphabet Inc. jumped the most in nearly two years after Google’s parent company reported upbeat results, which followed strong earnings at Microsoft Corp. and Apple Inc. a week earlier.

Investors still have reason to be nervous as the weeks go by before a widely expected interest rate hike from the Federal Reserve. The trajectory of monetary policy amid soaring inflation and the uncertain trajectory of the pandemic are now complicating portfolio decisions, and the magnitude and frequency of swings in tech stocks are beginning to worry analysts.

“These are very difficult waters for people to navigate – we’re dealing with a change in monetary policy, the reduction, the pandemic, inflation, profits and all these problems,” said Steve Sosnick, chief strategist at Interactive Brokers, during a telephone interview. “It’s much more difficult to determine what a stock’s fair value should be now, and market volatility reflects the difficulty people are having.”

‘Value’ Offset

Bloomberg

Shares of Meta tumbled 26% on Thursday, wiping out $251 billion in market value and triggering a global tech rout. The company’s disappointing results fueled fears that its flagship product and core advertising had plateaued.

Meta now trades as a “value” stock, a cheap stock on metrics such as earnings or book value, rather than a more expensive “growth” stock. For example, its 12-month forward price-to-earnings ratio fell to around 16, the lowest since the early months of the pandemic and below the S&P 500 Value Index for the first time on record.

Peak volatility

american stocksBloomberg

Diverging earnings reports from big tech and growth stocks are fueling wild swings in US stocks and internet stocks. The 10-day realized volatility of the Dow Jones Internet Composite Index – which tracks 42 internet-related companies – hit its highest level since April 2020.

Market capitalization fluctuations
Meta’s tumble briefly weighed on major tech, growth and social media names, with Amazon shares falling 7.8% on Thursday ahead of its earnings report. On Thursday, Twitter Inc., Snap Inc. and Pinterest Inc. all fell, dragging the Nasdaq 100 index down 4.2%, its worst sell since September 2020.

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But all three stocks rebounded on Friday after upbeat results from Snap and Pinterest allayed concerns that a slowdown at rival Meta reflected a broad slump in social media companies.

Eleanor C. William