A sell-off in tech continued this week, leaving the tech-heavy Nasdaq Composite down about 10% in September. The sell-off follows significant year-to-date outperformance for tech stocks. Even including the recent drawdown in the Nasdaq, the index is up 20% this year. This compares to a 3% year-to-date rise for the S&P 500.
As investors deal with this sell-off and hope to find a bottom, here's a review of some of the biggest stories in tech from the week.
Snowflake goes public
Cloud-based data platform Snowflake (NYSE:SNOW) went public on Wednesday to great fanfare. Selling 28 million shares and raising more than $3 billion, the debut marked the biggest software IPO ever.
With trading starting at $245 per share, Snowflake garnered a $68 billion market capitalization despite only bringing in $403 million of trailing-12-month sales. The valuation was difficult to justify, to say the least. Yet shares of the pricey stock proved to be quite resilient, finishing the week at $240.
Investors are likely enamored with the company's staggering growth. Revenue in the company's most recent quarter was up 121% year over year. In addition, customers surged from 1,547 to 3,117 over the same period.
Fastly customer TikTok faces challenges
The fast-growing video-based social network TikTok, owned by Chinese parent company ByteDance, made headlines this week as the Trump administration said it still plans to ban the app if the video-sharing network doesn't find a U.S. buyer.
The U.S. Commerce Department is following through with Trump's executive orders, announcing that TikTok will be removed from U.S. app stores starting midnight on Sunday. But President Trump seems hopeful that a deal will eventually materialize, noting in a news conference on Friday that a deal approved by the White House "could go very, very fast."
TikTok is a major customer of edge computing company Fastly (NYSE:FSLY). TikTok's U.S. business accounts for around 6% of Fastly's trailing-12-month reported revenue.
Apple stock quietly loses a fifth of its value
Shares of Apple (NASDAQ:AAPL) seemed like they moved in only one direction following the coronavirus market crash this spring. Leading up to early September, the stock had risen 140% from March lows, fueled by a blowout fiscal third quarter in which revenue rose 11% year over year and earnings per share jumped 18%. These strong results came despite the period being negatively impacted by store closures due to the pandemic. In addition, investors have applauded Apple's fast-growing services and wearables businesses.
But shares are finally taking a breather. The stock is now down nearly 23% from a record intraday high of about $138 per share on Sept. 2. Notably, however, the tech stock still isn't cheap; even after this pullback, Apple shares command a price-to-earnings ratio of 32.