(Bloomberg) -- A bad earnings season for the tech industry just got worse with Google’s parent joining the ranks of stocks tumbling after results.
Shares of Alphabet Inc. slumped almost 5 percent as of 1:10 p.m. in New York after first-quarter results sparked concern that the internet company is embarking on a new spending binge to keep up with its biggest rivals. Other tech giants fell in tandem, with the FANG complex that also includes Facebook, Amazon and Netflix seeing almost $85 billion in market value wiped out.
The slump was a fresh blow to investors who had hoped earnings would serve as an antidote to concerns that global trade disputes and the threat of government regulation would upend growth. So far, the latest earnings season has done little to validate bulls’ faith, with tech stocks falling an average 2.2 percent in first-day reactions.
The trend bodes poorly for Facebook and Amazon when they report in the next two days. Should the pattern continue, it’ll exacerbate pain for investors who poured money into the industry just as its biggest companies began faltering.
Fund managers have raised their exposure to tech stocks more than any other industry over the past month, according to a survey by Evercore ISI released on Tuesday. The bullish bets proved ill-timed as the group trailed all but one of the 11 sectors in the S&P 500 over the stretch.
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