This has been the year of reckoning for Big Tech stocks — even those of companies that have continued to grow sales by double digits.First, here’s how the 11 sectors of the benchmark index have performed this year:
Looking at the worst-performing sectors, you might wonder why the consumer discretionary and communication services sectors have fared worse than information-technology, the core tech sector. One reason is that S&P Dow Jones Indices can surprise investors with its sector choices. The consumer discretionary sector includes Tesla Inc. TSLA, +1.35% and Amazon.com Inc. AMZN, -1.54%, which has fallen nearly 50% this year. The communications sector includes Meta Platforms Inc. META, -1.
You might also blame the Twitter-related antics and sales of Tesla shares by CEO Elon Musk for the 65% decline in the electric-vehicle maker’s stock this year. But Tesla had a forward price-to-earnings ratio of 120.3 at the end of 2021, while the S&P 500 SPX, -0.60% traded for 21.4 times its weighted forward earnings estimate, according to FactSet. Those P/E ratios have now declined to 21.7 and 16.4, respectively.
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Happy New Year! Remember your resolution not to buy Tesla!
Who cares? Unless you are trying to ferment fear in people.