Posted on Oct 28, 2020 at 1:33 p.m.Updated Oct 28, 2020 6:33 PM
Tech falters with all the markets. The Nasdaq, the flagship technology index of the New York Stock Exchange, fell more than 3% shortly after opening on Wednesday. It is down more than 7% since its last record in early September. This latest bout of weakness comes a few days after SAP fell more than 20% on the stock market following the drop in its earnings forecasts. A real warning shot. The European jewel of professional software had dragged down all of European tech and part of its American competitors.
The brutal market reaction reminds us that “No one is immune, even the GAFAMs are susceptible to a stock market accident”, according to Jacques-Aurélien Marcireau, equity manager at Edmond de Rothschild AM. While tech company valuations are at record highs, “Investors are not necessarily prepared for a deceleration in the growth of the sector”, he warns.