2022 was a brutal year for some of tech‘s most prominent companies. Before we analyze why the likes of Tesla, Apple, and Meta severely underperformed last year, let‘s briefly recap how inflated tech valuations had become during the pandemic.
Emerging from a healthy market position in 2019, most mega-cap technology stocks like Facebook and Nvidia proceeded to smash earnings and valuation records in 2020 and 2021 as consumers flocked online. However, as 2022 progressed, the tide clearly turned for tech stocks.
Now let‘s dive into the five largest tech losers of 2022 and explore what exactly went wrong.
Tesla – long the darling of Wall Street suffered a disastrous 2022
Tesla‘s market cap exploded from around $75 billion pre-pandemic to as high as $1.2 trillion by late 2021 – making it at one point more valuable than the top six automakers combined!
However, rampant production cuts in 2022 amidst China‘s rigid lockdowns and battery material cost spikes finally cooled investor‘s valuation exuberance. Tesla‘s stock cratered nearly 61% – easily the worst performing among mega-cap tech names.
To fully appreciate Tesla‘s epic stock correction, let‘s analyze its 50%+ compound annual vehicle delivery growth rate since 2018.
| Year | Total Deliveries | Annual Growth |
|---|---|---|
| 2018 | 245,240 | – |
| 2019 | 367,656 | +50% |
| 2020 | 499,647 | +36% |
| 2021 | 936,172 | +87% |
You‘ll notice deliveries nearly quadrupled in just four years! No wonder investors got high on the stock.
However, 2022‘s perfect storm of supply chain chaos, soaring battery prices, China‘s unpredictable lockdowns, emerging EV competition, and Elon Musk‘s Twitter distractions finally torpedoed the Tesla growth story.
But with solid demand persisting for industry-leading EVs (still 6 month order backlogs!) and exciting developments around its Cybertruck and Optimus robot, Tesla still shows long-term promise once macro headwinds stabilize.
Hey friend, let me know your perspective on if Tesla‘s current battered stock price represents a buying opportunity?
AMD – Former Pandemic Winner Saw its Fortune Reverse
Like most semiconductor firms, AMD enjoyed explosive revenue growth supplying chips for pandemic winners like data centers and PC makers. However, the post-COVID demand air pocket hit AMD shares hard in 2022 with declining PC sales severely impacting revenues. Customer inventory drawdowns exacerbated market weakness.
Let‘s compare how AMD‘s silicon market share gain against arch-rival Intel helped its stock price significantly outperform over the past five years – until recent struggles.
| Year | AMD CPU Share | AMD Annual Return | Intel Annual Return |
|---|---|---|---|
| 2017 | 12% | +9% | -1% |
| 2018 | 13% | +80% | -2% |
| 2019 | 18% | +148% | +28% |
| 2020 | 22%+ | +100% | -17% |
| 2021 | 24%+ | +57% | +8% |
Sources indicate AMD recently overtook Intel in total CPUs shipped for the first time ever! However, the post-pandemic tech rout reversed its stock momentum.
Navigating the current supply-demand imbalance will remain challenging for AMD. However, its expanding data center presence and advanced 5nm server chips should drive growth when conditions improve.
Curious your thoughts here my friend – is now the time to buy the dip with AMD around $80 or proceed cautiously amid inventory corrections?
Apple – Is Its Stock Immune to Bad News?
Speaking of pandemic winners, Apple‘s blowout iPhone sales led its stock on an absolute tear higher since 2020 – at least until 2022‘s broad tech selloff. Shares remain 25% off highs.
Let‘s inspect key metrics around Apple‘s massively successful wearables and accessories segment – an area growing sales even faster than the iPhone in recent years!
| Segment | FY2022 Revenue | YOY Change |
|---|---|---|
| Wearables, Home & Accessories | $38.4B | +12% |
This division now generates nearly 15% of Apple‘s total sales. Between surging demand for AirPods and services like Apple Music fueling subscriptions, it‘s become integral to Apple‘s ecosystem.
Yes, lingering supply chain woes, inflationary pressures on consumers, and signs of weakening iPhone demand hurt Apple in 2022.
However, Apple enters 2023 in a position of strength – dominating critical hardware segments while growing services and software revenues. Combine its financial firepower with promising technologies around augmented reality, AI, and even an Apple Car – good luck betting against Apple long-term!
What do you think friend – will another year of category expansion and new products like its mixed-reality headset propel Apple stock back toward $3 trillion market cap territory in 2023?
Meta Platforms – It‘s Zuck vs. TikTok Battle Royale
2021 represented peak operating performance and stock price for Facebook and Mark Zuckerberg. However, 2022 brought fierce headwinds ranging from Apple privacy changes to TikTok competition.
Meta stock cratered a staggering 64%+ – falling behind even troubled streaming giant Netflix to rank as the S&P 500‘s poorest 2022 performer.
But TikTok may concern Meta investors most. Let‘s inspect social media platform preference trends by age group in 2022.
| Age | Most Used Platform |
|---|---|
| Teens (13-17) | TikTok (67%) |
| Young Adults (18-29) | TikTok (40%) |
With youths overwhelmingly shifted to TikTok for connecting and entertainment, Meta risks losing entire generations of future users and ad dollars. This while growth stalls among older Facebook and Instagram demographics.
Can Mark Zuckerberg turn the tide? Meta is clearly pouring immense resources into areas like video, AI recommendations, and exploring the metaverse.
However, fighting relentless innovation from younger tech upstarts while sustaining near-term profits remains intensely challenging. TikTok‘s explosive rise shows just how fiercely competitive and unpredictable technology can prove.
What do you think? Does Meta‘s staggering 64% value erosion signal an opportunity for long-term investors – or mark a company losing relevance as social media evolution accelerates?
The Takeaway – Volatility Expected but Future Leaders Will Emerge
In summary friend, even mega-cap technology leaders found little shelter from 2022‘s savage bear market and economic uncertainty. The inputs behind lofty pandemic-era valuations like zero rates or stimulus spending no longer boosted markets.
However, for long-term thinkers, substantial pullbacks across companies integral to the 21st century global economy seem unlikely to last forever.
5G networks, artificial intelligence, autonomous driving, quantum computing, cloud services, machine learning, digital payments – technology innovation relentlessly advances in exponential ways. And the companies best positioned to capitalize warrant investment even after this painful reset subsides.
Just remember that diversifying beyond tech into other sectors helps smooth volatility when Superman turns Clark Kent. Keep focusing on game-changing technologies – and the leading franchises enabling them – when constructing your portfolio.
The FAANG names may appear mortal in 2022‘s aftermath. But future legends poised to one day join them are being forged as you read this!
Let me know what you think about these points – where do you see the most opportunity emerging from the rubble among crushed tech stocks? Do certain companies intrigue you near recent lows? Or is more pain still ahead? Keen to hear your perspectives my friend!
