Big tech bellwethers continued to get slammed on Thursday, resuming a recent selloff that plagued the sector earlier in the week.
Shares of the 'FAANG' stocks -- Facebook (FB) , Amazon (AMZN) , Apple (AAPL) , Netflix (NFLX) and Alphabet (GOOGL) -- were all slumping on Thursday. Other mega-cap tech names including Microsoft (MSFT) and Nvidia (NVDA) were also moving lower.
Facebook was sliding 1.7% to $147.60 at the open, after falling 2.8% in the past four trading sessions. Amazon shares were dropping 1.7% to $959.22, after a four-day dip of 4.5%. Apple was down 0.9% to $143.79, after sliding 7.8% in the past four days, Netflix was declining 1.4% to $149.97, after slumping 9.3% in the past four sessions, while Alphabet was lower by 2.3% to $944.87, after declining 4.5%.
Alphabet shares felt the biggest losses on Thursday after Canaccord Genuity downgraded the stock, saying the tech giant is "expensive even by historical standards." In his note, Canaccord analyst Michael Graham wrote "we think much of the growth over the past two years is due to ad load increases on mobile search and YouTube, which (especially the former) will be hard to repeat."
Speaking of the recent FAANG selloff, Graham noted that the outlook for the tech sector is still solid, but that the short term may be more volatile. Tech valuations have gotten richer, but not at the same levels as the tech bubble of the late 90s and early 2000s, he contends.
"We still largely believe in the growth, but the valuations are a bit less obvious," Graham wrote of the tech sector in general. "That said, we still believe the group should reward investors, but we are taking a step back on GOOGL."
TheStreet's Jim Cramer, founder and manager of the Action Alerts PLUS charitable trust portfolio, wrote on Thursday that the recent selloff could be attributed to a rotation out of the tech sector and into banks, retail, healthcare and industrials.
On Wednesday, the sector briefly recovered from a two-day tech rout that many attributed to a Goldman Sachs report released on Friday that warned of increasing risks to mega-cap tech stocks and raised comparisons to the tech bubble. Those stocks had accounted for two-fifths of the S&P 500's gains this year, according to John Stoltzfus, Oppenheimer's chief investment strategist. "[That's] reason enough we'd think for some investors to take a little money off the table in the tech space," Stoltzfus said.