Shares of large technology companies suffered heavy losses on Thursday, dragging down many other U.S. stocks along with them, after analysts at Bank of America lowered their rating on Apple.
Tech stocks have been pushed down all throughout this year as investors have rotated out of growth and flocked to more defensive assets to deal with higher interest rates and get ahead of a possible recession.
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The technology-heavy Nasdaq Composite index rose on Tuesday and Wednesday, but the buying came after the worst two weeks since the Covid pandemic began. Now the downward trend is back, with the Nasdaq off 2.8%, good for the index’s steepest decline since Sept. 13. The broader S&P 500 index fell 2.1%.
Apple shares dropped nearly 5% on Thursday as Bank of America analysts led by Wamsi Mohan changed their rating to neutral from buy, straying from the buy position held by a majority of analysts polled by FactSet. The analysts pointed to several risks, including a weaker buying cycle associated with the iPhone 14 that Apple released this month. One day earlier, a report said Apple had scrapped its plan to boost iPhone production by 6 million units in the second half of the year.
Apple stock is now worth 20% less than it was at the end of 2021, while the Nasdaq is down 31% over the same period.
Of the technology companies with the largest market valuations, Microsoft was the most protected. It ended Thursday’s trading session down about 1.5%. But it was still a 52-week low for Microsoft’s stock. Google parent Alphabet also reached a 52-week low, dropping 2.6%. Shares of Meta Platforms slid 3.7%, Amazon moved down 2.7%, and Tesla was off 6.8%.
Smaller growth-oriented tech companies also suffered a poor day, including Coinbase, which dropped nearly 8% after Wells Fargo initiated coverage with an underweight rating, Shopify (-8.45%)., Rivian (-7.9%) and Roblox (-7%).
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