Written by Norman Isaac Mwambazi

Buying the dip? Big Tech stocks that have dropped as much as 20% in the last four weeks

The past month has not been so good for some tech stocks. Tech is one of the sectors that greatly …

The past month has not been so good for some tech stocks. Tech is one of the sectors that greatly benefited in the COVID-19 pandemic era, where stay at home directives and lockdown helped their stock grow to record highs, but now that the economy is almost fully reopened, some of these companies have seen their growth slowdown in recent months, especially in the previous four weeks. Investors are not new to these up and downward movements, but they don’t seem to know how long it will take for the sector to achieve a reverse movement.

Phillip van Doorn, an investment analyst at Dow Jones’ owned Market Watch has done a great job of compiling different lists of stocks we can either buy, hold, or sell over the past month, and in this, he compiled those big tech stocks on the benchmark S&P 500 Index (SPX) and the Nasdaq 100 Index whose price has dropped as much as 20% in the past month, and they could interest those that are looking to “buy the dip.”

But first, here is the list that shows how 11 sectors of the SPX have performed in the last four weeks. It is worth noting that the list below excludes dividends, and watch how the tech sector has been the third-worst performer over the past month, according to market data provided by FactSet. This should not blind you from the fact that tech has been the best performing sector from the last quarter of the 2019 calendar year all through 2020 at the height of the COVID-19 pandemic.

IndexPrice change – one monthPrice change – 2021Price change – 2020Price change since end of 2019
Health Care-8.1%10.5%11.4%23.1%
Real Estate-7.6%23.4%-5.2%17.0%
Information Technology-7.1%13.4%42.2%61.3%
Communication Services-6.9%20.3%22.2%47.0%
Utilities-6.4%3.1%-2.8%0.2%
Materials-6.0%10.2%18.1%30.2%
Industrials-5.4%11.3%9.0%21.3%
Consumer Staples-5.4%2.5%7.6%10.3%
Consumer Discretionary-3.0%9.3%32.1%44.3%
Financials-0.2%28.4%-4.1%23.2%
Energy14.2%45.2%-37.3%-9.0%
S&P 500 Index-5.2%14.5%16.3%33.1%
Source: FactSet

In general, the stock market has performed very well in 2021 so far, especially putting into considering that the market was coming from a 2020 that weathered the pandemic storm and posted a great performance for most sectors, apart from airlines, leisure, and hospitality.

According to Dan Ives, Managing Director and Senior Equity Research Analyst at Wedbush Securities, tech stocks have struggled over the past month because of the increased fear of rising interest rates as the Federal Reserve Bank starts the tapering process, and concern over growth-stock valuations. In a note Ives wrote to clients on Tuesday, October 5, 2021, he assured investors that this drop in tech stocks will be temporary, and that the sector will come back to end the year 10% up.

Ives said that Wall Street is massively underestimating the tech sector growth, adding that the upcoming earnings reports of the third quarter of the 2021 fiscal year (Q3 FY2021) show that the tech sector will do nothing but grow as we wind up the year. Ives also said that the tech sector will grow even higher in the next decade as most industries will make the transformation to conducting most of their businesses digitally.

Big tech drops over the past month

This list includes pure tech stocks on the S&P 500 that have lost up to 20% of their share price in the last four weeks, as well as tech-oriented stocks from other sectors. Other tech companies that are not in the SPX but are included in the Nasdaq 100 Index, and are large-cap, have also been included on this list.

Here are the 20 worst performers in the month between Friday, September 3, 2021 and Monday, October 4, 2021, according to data from FactSet:

CompanyPrice change – one monthPrice change – 2021 through Oct. 4Decline from 52-week highDate of 52-week high
DocuSign Inc. DOCU, +3.48%-20%11%-22%08/10/2021
MercadoLibre Inc. MELI, -2.33%-18%-5%-21%01/21/2021
Okta Inc. Class A OKTA, +1.80%-17%-12%-23%02/12/2021
Pinduoduo Inc. ADR Class A PDD, +2.17%-17%-52%-60%02/16/2021
Enphase Energy Inc. ENPH, +4.19%-17%-17%-37%02/10/2021
Peloton Interactive Inc. Class A PTON, +1.45%-16%-46%-52%01/14/2021
Adobe Inc. ADBE, +0.64%-16%12%-17%09/03/2021
Zebra Technologies Corp. Class A ZBRA, -0.10%-15%31%-16%09/03/2021
Trimble Inc. TRMB, -0.55%-14%22%-16%08/30/2021
CrowdStrike Holdings Inc. Class A CRWD, +1.34%-14%13%-17%08/30/2021
Synopsys Inc. SNPS, +0.42%-14%12%-15%09/03/2021
Nvidia Corp. NVDA, +1.22%-14%51%-14%08/30/2021
Facebook Inc. Class A FB, +0.20%-13%19%-15%09/01/2021
JD.com Inc. ADR Class A JD, +0.35%-13%-21%-36%02/17/2021
Zoom Video Communications Inc. Class A ZM, -1.35%-13%-23%-56%10/19/2020
Skyworks Solutions Inc. SWKS, +0.49%-13%4%-22%04/29/2021
Qualcomm Inc. QCOM, +0.42%-12%-17%-25%01/20/2021
IPG Photonics Corp. IPGP, +0.36%-12%-32%-42%01/19/2021
Teradyne Inc. TER, -0.44%-12%-11%-27%02/16/2021
PayPal Holdings Inc. PYPL, +1.50%-12%9%-18%07/26/2021
Source: FactSet

Big players like Facebook have been affected by whistle-blower claims and the recent outage of its entire services suite, Zoom called of its planned merger with Five9 (ticker: FIVN), and Adobe released its Q3 FY2021 earnings report last month.

Below is a summary of what Wall Street analysts polled by FactSet think about their performance, including ratings and their price target in the coming 12 months.

CompanyShare “buy” ratingsClosing price – Oct. 4Consensus price targetImplied 12-month upside potential
DocuSign Inc. DOCU, +3.48%77%$246.57$323.1831%
MercadoLibre Inc. MELI, -2.33%77%$1,592.75$2,113.6833%
Okta Inc. Class A OKTA, +1.80%74%$224.96$296.8832%
Pinduoduo Inc. ADR Class A PDD, +2.17%79%$85.08$136.4660%
Enphase Energy Inc. ENPH, +4.19%67%$145.03$199.2937%
Peloton Interactive Inc. Class A PTON, +1.45%74%$82.35$129.6757%
Adobe Inc. ADBE, +0.64%83%$558.49$710.3327%
Zebra Technologies Corp. Class A ZBRA, -0.10%58%$502.32$593.3318%
Trimble Inc. TRMB, -0.55%62%$81.37$94.6716%
CrowdStrike Holdings Inc. Class A CRWD, +1.34%88%$238.88$311.8331%
Synopsys Inc. SNPS, +0.42%87%$289.25$339.6917%
Nvidia Corp. NVDA, +1.22%81%$197.32$233.9319%
Facebook Inc. Class A FB, +0.20%76%$326.23$421.0929%
JD.com Inc. ADR Class A JD, +0.35%94%$69.41$92.7234%
Zoom Video Communications Inc. Class A ZM, -1.35%50%$259.58$350.5635%
Skyworks Solutions Inc. SWKS, +0.49%59%$159.69$216.3936%
Qualcomm Inc. QCOM, +0.42%62%$126.68$181.6743%
IPG Photonics Corp. IPGP, +0.36%43%$153.19$215.8941%
Teradyne Inc. TER, -0.44%56%$107.27$147.5638%
PayPal Holdings Inc. PYPL, +1.50%85%$255.01$331.9530%
Source: FactSet

PS: This is not investment advice. You are encouraged to make further research about the stocks before you make an investment decision. This article is intended for informational purposes.