What happened

Tech stocks were in the tank on Monday, with shares of Atlassian (NASDAQ:TEAM), MongoDB (NASDAQ:MDB), Zoom Video (NASDAQ:ZM), and CrowdStrike (NASDAQ:CRWD) all trading sharply lower -- as in, as much as 15% lower -- on no bad news whatsoever.

By the time trading had closed for the day, Atlassian shares were still down 4.5%, MongoDB was off 6.6%, Zoom Video had shed 7.9%, and CrowdStrike remained down a steep 11.7%.

Stock arrow going up then down and crashing into the floor.

Image source: Getty Images.

So what

Atlassian makes content creation and sharing software, MongoDB makes database software, Zoom Video does videoconferencing, and CrowdStrike handles internet security. Although their areas of focus differ widely, all four can generally be classified as tech stocks but also as growth stocks -- the kind of stock that gets valued largely on investor hopes that it will grow sales quickly rather than profitably (at least in the near term).

And those valuations have gotten pretty extreme.

Unprofitable Atlassian, for example, sells for more than 25 times its annual sales, and it hasn't earned a profit over the last 12 months. Similarly, MongoDB sells for nearly 23 times its annual sales and is also unprofitable.

Zoom Video costs more when valued on sales -- 49.6 times sales -- but on the plus side, it has at least a tiny trailing profit to its name. CrowdStrike both costs more -- 36.7 times sales -- and has no profits.

Now what

Interestingly, all four of these stocks also declined in Friday trading, which suggests that whatever is causing the share prices to go down, it's pretty broad based and not tied to any specific fault in the stocks themselves -- and is potentially the start of a trend.

My hunch? Certain investors have decided it's too risky to be investing in profitless tech stocks, no matter how fast they are growing, at valuations of two dozen or more times the amount of sales they make in a year. Sure, according to analysts polled by S&P Global Market Intelligence, Atlassian is expected to grow earnings at about 20% annually over the next five years, CrowdStrike at 25%, and Zoom Video at 73.5%. And yes, MongoDB (which doesn't have any published predictions for its earnings growth) is expected to quadruple its sales over the next five years.

Be that as it may, lacking any profits (or very large profits in the case of Zoom) to hang a P/E valuation on, it's perfectly understandable that some investors are backing away from these stocks on the eve of a likely recession.