Nasdaq 100 forecast: tech stocks collapse is worse than you think
- The Nasdaq 100 index collapsed by 32% in 2022.
- A look at key Nasdaq 100 constituents paints a darker picture.
- Companies like Tesla, Meta, and Nvidia collapsed by over 60%.
The Nasdaq 100 index had a terrible year as the Federal Reserve embraced an extremely hawkish tone. The bank delivered a series of jumbo rate hikes that pushed the official cash rate to 4.50%. Inflation rose to a 4-decade high of 9.1% before pulling back to 7.3%. As it dropped, the Nasdaq 100 underperformed the S&P 500 and Dow Jones.
Tech stock collapse was worse
The Nasdaq 100 index plunged by more than 32%, its worst year in decades. However, the situation was much worse beneath the surface as most constituent stocks plunged.
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EV stocks led the charge in the company’s sell-off. Lucid stock price plunged by 82.39% while Rivian dropped by 81%. Tesla, the biggest EV company in the world, saw its stock plunge by over 70% in 2022, shedding over $700 billion worth of value.
Semiconductor stocks also plunged in 2022. After soaring in the past decade, Nvidia, Marvell, AMD, and Intel shares plunged by more than 50%. In total, the four companies shed over $200 billion in their combined market cap.
FAANG stocks also found gravity as growth eased. Meta Platforms stock price crashed by 64% as it erased over $600 billion worth of value. It declined as the metaverse project floundered and its advertising business crashed. Amazon and Netflix stock prices fell by over 50% as well.
Other top tech stocks that plunged in 2022 were Carvana, Atlassian, PayPal, Datadog, and Crowdstrike. And analysts caution that tech stocks will continue falling as long as the Fed maintains an extremely hawkish tone.
They also believe that some tech companies could go bankrupt in 2023 if the situation worsens. Some of the top firms that will likely collapse in 2023 are Vroom, Carvana, Upstart, and Bakkt Holdings.
Nasdaq 100 forecast
The daily chart shows that the Nasdaq 100 index has been in a strong sell-off in the past few months. In this period, the index has remained below the descending trendline shown in black. It has also moved below the 50-day and 100-day moving averages.
The index has found a strong support at $10,460. Therefore, there is a likelihood that the index will continue falling in the coming months. This view will become invalid once the US demonstrates that inflation is falling and the Fed changes its tone.