It may not last beyond earnings season, but big fear is dominating Big Tech.
Every quarter during earnings season there are always companies that fail to meet the expectations of analysts or their own executives. It has gotten to the point where failing to meet an enthusiastic estimate is seen as more important than a company’s continued success at increasing sales or profit margins.
Then again, as we saw last week with Facebook FB, -2.19% a maturing business model and concurrent desire for a responsible business approach can lead an expected decline in the sales growth rate and simultaneous rapid increase in expenses. This is a bad combination for a stock even if a company continues to boost sales rapidly and turn tidy profits.
On Monday, the tech-heavy Nasdaq 100 Index NDX, -1.42% fell 1.4%, while the S&P 500 Information Technology Sector Index GSPT, -1.78% dropped 1.8%. (The broader S&P 500 Index SPX, -0.58% was down 0.6%.)
The worst performer among the Nasdaq 100 on Monday was Take-Two Interactive Software TTWO, -7.73% which slid 7.7%. The company is expected to announce its quarterly results after the market close on Aug. 2.
Here’s a look at big game developers and esports.
The second-worst performer among the Nasdaq 100 was Netflix NFLX, -5.70% whose shares were down 5.7%. Investors remain fixated on one number each quarter for Netlflix — subscriber growth — which may foretell a lot more trouble for the stock.
Take-Two competitor Electronic Arts EA, -5.68% was also down 5.7% on Monday. The company disappointed investors on July 26.
Shares of Facebook slipped 2.2%, for a one-week decline of 18.9%, following a disappointing outlook from the company’s executives on July 25.
Tesla TSLA, -2.36% decreased 2.2% on Monday, bringing a loss to 4.3% in one week and 6.8% for July. Investors have been going through a periodic questioning of the stock’s high valuation as CEO Elon Musk fails to meet his lofty electric-car-production goals. The California-based car maker is scheduled to announce second-quarter results Aug. 1 after the stock market closes.
