Tech stocks staged a temporary rebound in financial markets on Friday as Amazon.com Inc’s spectacular results reassured traders not to leave territory weakened by the global monetary tightness cycle and the historic crash of Facebook owner Meta.
The company, led by Chief Executive Mark Zuckerberg, wiped out more than $200 billion of its market value after issuing a disappointing forecast, which represents the biggest single-day slide for a US company.
The sell-off of Meta Platform Inc spread to other listed tech companies, dragging Wall Street into the deep red, ahead of Amazon’s solid earnings call after the market closed on Thursday.
Driven by the tech giant’s results, Asian equities rose nearly 1% and shares of Frankfurt-listed Amazon were up 12%. Shares of social media platform Snap Inc were up more than 50% in pre-market trading, after falling by a quarter in the previous session, another sign that sentiment towards the sector was stable.
Overnight volatility attracted retail buyers. Thursday’s net purchases of Meta shares by retail investors hit a 3-1/2-year high of $231 million, according to Wanda Research, the third-highest day of net buying since January 2014.
Mark Heifel, chief investment officer at UBS Global Wealth Management, said the big picture for the sector was not bleak.
“Overall, the earnings outlook is still solid, with the global tech sector on track for earnings growth of approximately 15%,” he wrote in a morning note to clients.
“In our base case, we expect valuations to stabilize and share prices to see strong mid-teens earnings growth over the next 12 months.”
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