The ongoing pandemic, geopolitical conditions, an increasing consumer price index, and interest rate hikes, all resulted in a more than $5 trillion loss in valuation for the top 25 technology* companies in 2022, finds GlobalData, a leading data and analytics company.

Ragupathy Jayaraman, Business Fundamentals Analyst at GlobalData, comments: “At present, investors’ main concerns are the Fed rate hikes and how stocks are anticipated to further decline up to the first half of 2023. Top gainers include Tencent, Broadcom, Oracle, ASML, Adobe and SAP, which reported more than 20% in their quarter over quarter (Q-o-Q) valuation in Q4 2022.”

Meta, Apple, Amazon, Microsoft and Google’s (FAAMG) stocks accounted for more than 60% of the top 25 global tech stocks’ valuation. Apart from Microsoft, the other four companies witnessed a Q-o-Q decline in their valuation, with Amazon losing the most (25%). Apple’s start and end to the year has been a total contrast, with the company touching the milestone valuation of $3 trillion in January 2022 but ending up with $2 trillion in December 2022. Furthermore, in the first week of January 2023, the company’s valuation dropped below $2 trillion for the first time since March 2021. The company’s shipment targets for the fiscal are expected to reduce due to supply chain constraints.

Jayaraman continues: “Amazon lost the most in valuation with $294.3 billion in Q4 2022, its biggest decline in almost two decades. It also dropped from the trillion-dollar valuation club. The company capitalized enormously from consumers’ post-pandemic shopping trends in the last couple of years. However, the situation has changed with many consumers returning to shopping in stores. Furthermore, higher costs, supply chain issues and the war in Ukraine impacted the company’s performance. Microsoft is the only company in the FAAMG group to have valuation growth in Q4. The company has increased its focus on cloud business in the past year and trails only Amazon.”

The semiconductor sector continues to witness weak demand and supply chain issues. Despite reporting more than 15% Q-o-Q growth in valuation, companies like Samsung and Nvidia anticipate their profits to nosedive in the current fiscal year. Samsung’s performance might dip owing to a fall in the price of key memory chips and Nvidia might be impacted due to low demand for its graphics processing units (GPUs). Both Intel and AMD posted marginal growth in their market cap in Q4 2022 compared to the previous quarter.

*Technology companies include software and hardware developers, IT service providers (including internet-based service providers), and manufacturers of electronics, including semiconductors, mobile devices, etc. GlobalData ranks the Top 25 companies based on MCap performance.