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.

Cases: 319704

Reported Deaths: 7369
CountyCasesDeaths
DeSoto22276267
Hinds20677421
Harrison18407317
Rankin13880282
Jackson13689248
Madison10249224
Lee10056176
Jones8464167
Forrest7827153
Lauderdale7260242
Lowndes6509150
Lamar634888
Lafayette6310121
Washington5420137
Bolivar4837133
Panola4669110
Oktibbeha466098
Pearl River4604147
Marshall4573105
Warren4440121
Pontotoc425373
Union415777
Monroe4155135
Neshoba4061179
Lincoln4008112
Hancock386687
Leflore3515125
Tate342486
Sunflower339491
Pike3369111
Alcorn325972
Scott320174
Yazoo314171
Adams307486
Itawamba305178
Copiah299966
Coahoma298784
Simpson298189
Tippah291968
Prentiss283861
Leake271974
Marion271280
Covington267283
Wayne264442
Grenada264087
George252051
Newton248663
Tishomingo231568
Winston229981
Jasper222148
Attala215073
Chickasaw210559
Holmes190374
Clay187854
Stone187833
Tallahatchie180041
Clarke178980
Calhoun174132
Yalobusha167840
Smith164034
Walthall135347
Greene131833
Lawrence131024
Montgomery128643
Noxubee128034
Perry127138
Amite126342
Carroll122330
Webster115032
Jefferson Davis108033
Tunica108027
Claiborne103130
Benton102325
Humphreys97533
Kemper96629
Franklin85023
Quitman82216
Choctaw79118
Wilkinson69532
Jefferson66228
Sharkey50917
Issaquena1696
Unassigned00

Alabama Coronavirus Cases

Cases: 548323

Reported Deaths: 11288
CountyCasesDeaths
Jefferson809531565
Mobile42066826
Madison35663525
Tuscaloosa26162458
Shelby25595254
Montgomery25081612
Baldwin21839313
Lee16265176
Calhoun14718325
Morgan14626285
Etowah14171363
Marshall12449230
Houston10764288
Elmore10295213
Limestone10182157
St. Clair10160251
Cullman9941201
Lauderdale9596249
DeKalb8967189
Talladega8458184
Walker7335280
Autauga7230113
Blount6944139
Jackson6922113
Colbert6414140
Coffee5627127
Dale4929114
Russell454941
Chilton4472116
Franklin431083
Covington4273122
Tallapoosa4136155
Escambia401780
Chambers3726124
Dallas3607156
Clarke352961
Marion3242106
Pike314078
Lawrence3129100
Winston283572
Bibb268464
Geneva257581
Marengo250665
Pickens236862
Barbour234659
Hale226878
Butler224071
Fayette218162
Henry193843
Cherokee187245
Randolph187044
Monroe179341
Washington170439
Macon162951
Clay160159
Crenshaw155657
Cleburne153244
Lamar146537
Lowndes142054
Wilcox127030
Bullock124242
Conecuh113430
Coosa111429
Perry108626
Sumter105732
Greene93534
Choctaw62025
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We continue to monitor a tropical disturbance in the Gulf of Mexico. This will be in heavy rainfall two locations across the southeast over the course of the weekend, and flooding rainfall could be in tow as well. Things are looking better for Father’s Day itself, thankfully.
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