The technology sector continued its downward break since selling started last Friday, June 9. Though the NASDAQ (QQQ) is down just 3% in the last week, compared to its 17.4% gain year-to-date, momentum and negative sentiment could give investors in the sector significant losses.
Watch "FAAMG" or Facebook (NASDAQ: FB), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Netflix (NASDAQ: NFLX), and Google (NASDAQ: GOOGL). These bell-weather tech stocks are stumbling, with FB and even AAPL stock showing a "double top" formation between May and June. Despite Apple’s inexpensive forward P/E multiple of 13.7 times, the market did not hesitate shaving around 7% from the stock.
WWDC’s announcements give Apple fans many reasons to stick with the brand. The company is release two iPad Pro updates, HomePod, an AR development kit, and a refresh to the iMac. Note that the iMac will use an Intel (NASDAQ: INTC) processor and will support Retina 5K display. The dedicated graphics card is an AMD (AMD) Radeon 555 on the base model. In the previous model, Apple powered the computer with a weak, Intel-made Iris Pro integrated GPU.
The exorbitant valuation in Amazon and Netflix stock could prove costly for shareholders. The correction is already pulling the highly speculative post-IPO stock, Snap Inc. (NYSE: SNAP). Snap closed close to a new post-IPO low of $17. With no fundamentals supporting it, expect more losses for SNAP stock holders.
