Facebook, Google and Amazon have all experienced some controversy this year – but that isn’t deterring investors.
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Both Amazon and Apple have set new records, and Facebook isn’t far off its record high after shares fell to almost $152 in April, in the aftermath of the Cambridge Analytica data scandal. Now they are trading above $193.
This week Facebook confirmed it has data-sharing partnerships with Chinese firms including Huawei – a company previously flagged by U.S. intelligence as a security threat.
Google had its own controversy after the company inadvertently listed “Nazism” as one of the ideologies of the California Republican Party.
Amazon has been accused of destroying the retail sector, and even President Donald Trump has weighed in on the e-commerce giant’s growing dominance.
“I have stated my concerns with Amazon long before the Election. Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!” Trump tweeted in March.
Even with these snafus, tech giant shares have continued to climb.
JJ Kinahan, chief market strategist, at TD Ameritrade told FOX Business that as the tech-heavy Nasdaq hits new record highs, “it could mean that investors believe the sector is insulated somewhat from the steady drumbeat of tariff issues because so many people and businesses use tech company products.”
Tariffs, and fears of a trade war have underpinned markets in recent weeks.
Kinahan added that when it comes to the tech sector there is a hesitancy for consumers to change their behavior and buying habits. For example, if tariffs are put on steel it is fairly easy to substitute, but for technology it is hard to replicate – like Facebook. He also brought up the point that so many people threatened to boycott Facebook after the Cambridge Analytica scandal, but when it came down to it, this didn’t happen.
So what could dent the tech sector? Kinahan said an economic slowdown. He was somewhat concerned last week about potential economic problems in Europe, adding that a significant slowdown in Europe could hit the tech sector.
A recent note from Goldman Sachs stated that as the economy decelerates the tech sector tends to underperform, and within the tech sector software companies hold up better, while software and semiconductors lag.
Kinahan also noted that tech stocks should be big beneficiaries of tax refunds, because tech “is an infrastructure.”