People wait in line for t-shirts at a pop-up kiosk for the online brokerage Robinhood along Wall Street after the company went public with an IPO earlier in the day on July 29, 2021 in New York City.
Spencer Platt | Getty Images News | Getty Images
Macro conditions were already troubling for tech. With inflation at a 40-year high and the Federal Reserve signaling a series of interest rate hikes on the horizon, investors started the year by fleeing growth stocks, sending the Nasdaq in January to its worst month since March 2020, the early days of the pandemic.
The outlook over the past three weeks has gone from bad to substantially worse. Russia’s invasion of Ukraine last month rattled an already fragile stock market, sprinkling geopolitical unrest into the stew of volatility. Oil prices just spiked to their highest in over 13 years, and other commodity prices are on the rise on supply concerns as Russia is a key producer of wheat, palladium and aluminum.
Energy and utilities are the only places in the U.S. where investors are finding comfort. While everything else is getting hit, the highest-growth tech stocks are proving unpalatable to all but the most fervent industry bulls.
“The mood of the market is real foul right now for good reasons,” Snowflake CEO Frank Slootman told CNBC’s “Mad Money” on Wednesday. Shares of the cloud data analytics vendor plunged even though revenue beat estimates and the company gave an upbeat forecast.
Snowflake is more than 50% off its 52-week high reached in November. That makes the company a relative safe haven compared to wide swaths of the tech industry. Numerous stocks have lost at least three-quarters of their value since peaking in late 2021, and some well-known names are down 90% or more.
Byron Deeter, a partner at Bessemer Venture Partners and a cloud evangelist, said the median member in his basket of subscription software stocks is down 53%, and that price-to-sales multiples, on average, have compressed from 25 to below…