Key factors such as interest rate hikes, a surge in consumer price index, and the ongoing geopolitical risks following the Russia-Ukraine conflict have continued to affect the technology sector, with 21 of the top 25 technology* companies reporting a combined loss of $1 trillion in valuation in Q3 2022, finds GlobalData, a leading data and analytics company.

Ragupathy Jayaraman, Business Fundamentals Analyst at GlobalData, comments: “The unexpected surge in the consumer price index in August affected tech stocks considerably. Apple, Amazon, Intuit and ADP were the only four companies in the top 25 to post a positive growth in their market capitalizations (MCap) in Q3 2022 compared to Q2 2022.”

The biggest losers during the quarter include TSMC, Tencent, Nvidia, Samsung, ASML, Adobe and Intel, with each losing more than 10% in their valuation in Q3 2022 compared to the previous quarter.

FAAMG stocks (Meta, Apple, Amazon, Microsoft and Google), accounted for more than 65% of the top 25 global tech stocks’ valuation. Although it lost $800 billion in MCap between January and October this year, Apple remains the most valuable company in the US. The tech giant’s MCap remained flat between June and September at $2.2 trillion following increasing inflation, supply chain issues and interest rate hikes. Meanwhile, Microsoft witnessed a $183.9 billion drop in its MCap in Q3 compared to Q2, and the company anticipates another pullback in its Q3 earnings due to the interest rate hikes.

Google witnessed the highest valuation drop of $186.9 billion in Q3 in the top 25 tech stocks. The company undertook cost-cutting measures such as shutting down its Stadia gaming service and slowing down hiring, amid increasing fears of a recession in the US.

Jayaraman adds: “The semiconductor sector continues to witness low inventories, supply chain constraints and competitive pressures with the situation expected to continue in 2023. Semiconductor major Intel’s reduced earnings in the first two quarters continues to pressurize its stocks’ performance with the company anticipating its earnings to be lower in the subsequent quarters as well. Weakened demand for consumer PCs also impacted Intel’s performance. TSMC, Nvidia and Samsung all reported more than a $50 billion reduction in their valuation in Q3 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, and mobile devices. GlobalData ranks the Top 25 companies based on MCap performance.