Tech earnings started strong and have since often led to share declines, disappointed investors, and, oddly enough, a NASDAQ over 5,100. Following Apple’s share decline, and Microsoft’s embarrassing $7.6 billion whoopsie, tech giants have, in many cases, failed to excite.
Today, Facebook quickly fell 5 percent, following reporting a profit and revenue beat; Twitter gave up around 14 percent after its user growth, or lack thereof, did little to assuage concerns about its long-term cashflows; Yelp took a 25 percent face-punch in a single day over lowered projections and general malaise. The company’s 52-week high is $86.88. Its shares closed today at $25.11; And Tableau, which also beat on revenues and profits fell around 10 points, a recovery from mid-session lows.
So what’s going on? A few things, including currency headwinds for the big internationals. However, more broadly, it seems that investor sentiment is tilted toward expectations of earnings beats higher than what has been reported. Or put more simply, with valuations where they are today, just being better-than-expected can in many cases not be good enough.
The more important question is what the impact of the above may have on the potential IPO calendar. It’s a nearly silly moment — major tech firms are stumbling, but the larger NASDAQ is so richly valued that there is little in the way of new frictive elements to slow the current roll of tech’s game.
You can handicap investor sentiment on your own, of course.
It’s worth rewinding to when Netflix reported earlier this cycle, and hit new all-time highs for the second time in a week. Here’s us:
So far we are off to a very strong cycle of technology earnings from a variety of companies. Most majors have yet to report, let alone the smaller public tech firms, but signals, so far, are positive. That fact may keep the NASDAQ around 5,000, if not a touch higher.
And that’s where the NASDAQ is, even in the face of recent declines from the latest tech team.
There is still a decent cadre of companies that have yet to report. Etsy, MobileIron, Hortonworks, Cisco, HP, LendingClub, Sprint and so forth. So we still have enough time to right the ship if we can. But certainly, tech isn’t showing its best face on the public markets today.