Scarred, Intact
“They’ll come out bruised and scarred but they’ll come out intact,” said James Cakmak, an analyst at Monness Crespi Hardt & Co. who has maintained his buy rating and $210 price target on Facebook. “Radio and TV aren’t the future, we know that, digital is. And it’s not going to affect the direction of the dollars, which is toward Google and Facebook. The question is what is the speed that they get there.”
The damage to all these stocks over the past couple weeks remains contained if viewed through a wider lens. Even after Tuesday’s 7 percent rout, Nvidia’s stock is double where it was a year ago. Tesla, while losing almost a fifth of its value this year, is still up sevenfold from the start of 2013.
Analyst estimates and fund flows show few signs of panic. In fact, profit forecasts for the tech industry have been barely changed over the past two weeks despite the market turmoil. At 30 percent, the expected pace of growth exceeds all but one industry in the S&P 500 Index.
Investors in ETFs seem in no rush to bail. Take the PowerShares QQQ Trust Series, the biggest fund tracking the Nasdaq 100. Outflows peaked around $2 billion on March 19 and trickled down to less than one-tenth of that amount Tuesday, a day when Nasdaq companies lost $260 billion in market value.
“Tech has given us more than it has taken away,” said Kim Forrest, senior portfolio manager at Fort Pitt Capital Group LLC in Pittsburgh. “The future is going to have more connected devices.”
This article was provided by Bloomberg News.