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 Apple’s stock rating.
Tech stocks have been pushed down all year as investors have rotated out of growth and flocked to more defensive assets to deal with higher interest rates and to get ahead of a possible recession.
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The tech-heavy Nasdaq Composite rose on Tuesday and Wednesday, but the buying came after the worst two weeks since the onset of the Covid pandemic. Now the downward trend is back, with the Nasdaq off 2.8% on Thursday — it’s steepest one-day setback since Sept. 13. The broader S&P 500 fell 2.1%.
Apple shares declined nearly 5% 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 took the lightest blow. It ended Thursday’s trading session down about 1.5%, which was still a 52-week low. Google parent Alphabet also reached a 52-week low, dropping 2.6%. Shares of Facebook parent Meta Platforms slid 3.7%, Amazon declined 2.7% and Tesla was off 6.8%.
Smaller growth-oriented tech companies also suffered, with Coinbase down nearly 8% after Wells Fargo initiated coverage with an underweight rating. Elsewhere, Shopify fell 8.45%, Rivian declined 7.9% and Roblox was off 7%.
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