Zuckerberg stands his ground during year of crises

In an exclusive interview, Mark Zuckerberg tells CNN's Laurie Segall why, despite a year of negative headlines, he thinks Facebook can still be a force for good.

Posted: Nov 21, 2018 4:23 PM
Updated: Nov 21, 2018 4:42 PM

The recent stock market meltdown has hit the tech sector particularly hard. How hard? A sextet of well-known techs -- Apple, Amazon, Microsoft, Google owner Alphabet, Facebook and Netflix -- have lost a collective $1.1 trillion from their all-time highs.

Even though these companies, which some have dubbed the Fab 6, bounced back a bit with the overall market Wednesday, they are in a correction, down more than 10% from recent peaks.

In fact, several of them are even in bear market territory -- 20% or more below their highs.

Investors are clearly reevaluating whether the tech sector, which has led the market's surge for the past few years, deserves to remain a leader on Wall Street.

There are growing concerns that demand for high-priced gadgets like Apple's (AAPL) iPhones are beginning to slow.

Several iPhone suppliers have recently warned of weak sales and Bloomberg reported Wednesday that China's Foxconn Technology Group, which makes iPhones for Apple, is planning significant cost cuts next year.

Foxconn Technology Group would neither confirm nor deny the Bloomberg story, saying in a statement to CNN Business that it regularly reviews its global operations and that "the review being carried out by our team this year is no different than similar exercises carried out in past years."

The possibility of more government regulations on tech -- particularly advertising based companies such as Facebook (FB) and Google (GOOGL) -- is growing too, and not just in the US.

Amazon's (AMZN) increased clout in retail, cloud computing and media has some wondering if the company could eventually find itself the target of antitrust investigations around the globe, similar to Microsoft (MSFT) back in the late 1990s.

Finally, there's the simple matter of whether or not the big tech companies deserve their lofty valuations. Amazon and Netflix (NFLX) each trade for about 60 times 2019 earnings forecasts -- a huge premium to the broader market.

Big slide leads to buying opportunities

So what's next for the tech sector?

Dave Smith, senior vice president of domestic equities with Bailard, said the recent slide has led to the proverbial case of babies being thrown out with the bathwater -- panic selling that has led to "particularly stark punishment" for some top tech stocks.

"There are a lot of attractive growth stocks that are now trading at steep discounts," Smith said. "These are the ones that we want to own."

Smith, who is also the subadviser for the Nationwide Bailard Technology and Science Fund, said that semiconductor stocks in particular are looking like good values.

According to Morningstar, that fund had chip leaders Texas Instruments (TXN), Nvidia (NVDA) and Broadcom (AVGO) among its top 25 holdings at the end of October. The fund's top five holdings were Microsoft, Facebook, Apple, Alphabet and Cisco (CSCO).

Adam Phillips, director of portfolio strategy at EP Wealth Advisors, also said it might be time to go shopping in the tech sector.

Phillips said it's still "too early to sound the all clear" on volatility but he noted that he recently bought some Amazon shares because he thinks there was "indiscriminate selling" in the stock in the past few weeks.

There's another reason why tech may rebound too. More mergers could be on the horizon, especially if earnings growth and the economy start to slow.

Daniel Ives, an analyst with Wedbush Securities, said in a recent report that the sell-off in software stocks in particular may lead to more deals, especially in the lucrative cloud computing market. To that end, IBM (IBM) just plunked down $34 billion for Red Hat.

And Ives noted that Alphabet, which just hired away Oracle's (ORCL) cloud guru Thomas Kurian to lead Google Cloud, could now be "on the war path" for cloud deals in order to compete more effectively with Microsoft and Amazon.

So 2019 could be the year that big tech companies start to put even more of their gigantic cash hoards to use for acquisitions.

CNN's Jordan Valinsky contributed to this report.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 65436

Reported Deaths: 1848
CountyConfirmedDeaths
Hinds5544117
DeSoto357430
Harrison240635
Madison239664
Rankin225132
Jackson222542
Jones185058
Forrest175855
Washington160640
Lauderdale139790
Lee138333
Neshoba128492
Lamar119214
Oktibbeha109638
Bolivar109333
Lowndes105837
Warren103332
Panola102612
Scott99520
Sunflower99224
Lafayette95615
Copiah94528
Leflore90762
Pike89635
Holmes87348
Grenada83821
Yazoo81512
Pontotoc8098
Lincoln79641
Leake78625
Simpson78630
Monroe76952
Wayne75321
Coahoma71511
Tate70527
Marshall6749
Marion64320
Winston61116
Adams61025
Covington61013
Union60116
George5494
Newton53711
Pearl River52937
Tallahatchie52210
Attala51525
Walthall49119
Chickasaw45019
Noxubee44811
Calhoun4079
Prentiss40310
Claiborne39813
Alcorn3975
Smith39713
Clay39214
Jasper3819
Hancock37314
Tishomingo3635
Itawamba34810
Tippah34213
Clarke32525
Tunica3226
Montgomery3153
Lawrence3127
Yalobusha31210
Humphreys28311
Carroll26011
Quitman2521
Greene23611
Jefferson Davis2286
Kemper22714
Amite2256
Webster22512
Perry2237
Wilkinson20113
Jefferson1946
Sharkey1944
Stone1864
Benton1420
Choctaw1314
Franklin1192
Issaquena251
Unassigned00

Alabama Coronavirus Cases

Confirmed Cases: 94827

Reported Deaths: 1674
CountyConfirmedDeaths
Jefferson12743242
Mobile9565206
Montgomery6521148
Madison525030
Tuscaloosa410371
Unassigned347461
Baldwin344323
Shelby320133
Marshall309034
Lee262844
Morgan233017
Etowah207530
DeKalb177113
Calhoun170413
Elmore169438
Walker150264
Houston136412
Russell13422
Dallas131123
St. Clair131016
Limestone128413
Franklin125820
Cullman120112
Colbert115613
Lauderdale113917
Autauga106521
Escambia105416
Talladega98613
Jackson9454
Tallapoosa84979
Chambers83538
Dale82323
Blount7743
Chilton7676
Butler75935
Coffee7475
Covington72620
Pike6907
Barbour5695
Lowndes56724
Marion56724
Marengo54614
Clarke4969
Hale46726
Bullock45411
Winston44411
Perry4364
Wilcox41810
Bibb4164
Monroe4154
Randolph39410
Pickens3849
Conecuh38210
Sumter36218
Lawrence3441
Macon33213
Washington32712
Crenshaw3133
Choctaw27912
Cherokee2637
Geneva2550
Henry2523
Greene25011
Clay2495
Lamar2172
Fayette1985
Cleburne1251
Coosa1012
Out of AL00
Tupelo
Clear
87° wxIcon
Hi: 96° Lo: 73°
Feels Like: 91°
Columbus
Clear
85° wxIcon
Hi: 95° Lo: 72°
Feels Like: 93°
Oxford
Clear
86° wxIcon
Hi: 94° Lo: 71°
Feels Like: 88°
Starkville
Clear
86° wxIcon
Hi: 92° Lo: 69°
Feels Like: 89°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather