Shares of U.S. tech titans Amazon.com Inc. (AMZN), Alphabet Inc. (GOOGL), Netflix Inc. (NFLX) and Facebook Inc. (FB) saw a total of $86.6 billion erased from their combined market capitalization this Tuesday as the high-flying sector shows extreme vulnerability to large price swings after years of reaping in steady rewards for shareholders. (See also: Apple Vs. Facebook: May the Best Stock Win.)
FANG stocks, a basket of high-growth, household-name tech stocks, championed the nine-year bull market, becoming Wall Street darlings as they continued to post stellar earnings growth and scale their global businesses. Starting in January, however, waves of broader market uncertainty worked to pull many of 2017's best performers into correction territory on a handful of concerns such as rising rates, an impending global trade war and new regulation facing the tech sector.
GOOGL Biggest Loser Despite Earnings Beat
Data-driven advertising businesses including social media empire Facebook and search giant Alphabet have been hard hit by calls from lawmakers and users demanding more oversight on their use of consumer data. Last month, Facebook lost a whopping $100 billion in value in the weeks following news of its latest data scandal involving Cambridge Analytica, in which the British political consulting firm allegedly used information on over 87 million users without their consent to aid President Trump's campaign in the 2016 U.S. presidential election.
Alphabet saw the biggest dip Tuesday, with a 4.8% decline bringing its market value loss near $36 billion. Despite beating the Street's consensus estimates in Q1, a threefold jump in spending, thinning margins and fears over more regulation failed to outweigh positive results from the Mountain View, California-based internet behemoth.
Tech's sell-off Tuesday follows $64 billion shed from Apple Inc.'s (AAPL) value in the three trading sessions through Monday. News of weaker-than-expected mobile-segment demand from supplier Taiwan Semiconductor (TSM) last Thursday has spooked investors into "full panic mode" ahead of the smartphone maker's highly anticipated fiscal second quarter results next week, according to GBH Insights analyst Daniel Ives. AAPL shares fell another 1.4% on Tuesday, bringing its YTD loss near 4%. (See also: 2 Risks Facing Netflix's Rally.)