Since the bursting of the Internet bubble over a decade ago, technology stocks have been a relatively safe bet compared to the more volatile financial and energy sectors.
But a bumpy last month shows that plenty of risk remains in stocks ranging from chipmakers to Internet search, cloud storage and plain vanilla PCs and software.
Russ Koesterich, global chief investment strategist for iShares, is concerned that tech recently had been tamer than usual until April, when a sudden return to volatility highlighted the sector's risks. He notes that the sector fell 6.5 percent during the April downturn, while the broader market lost 4.25 percent.
Volatility returned to the tech sector with a vengeance in April as an index measuring Nasdaq 100 price swings rose 16 percent higher than the VIX, which measures the volatility of the S&P 500.
The spike was led by Apple’s nine-session losing streak ahead of its earnings release, a downtrend that shaved almost 19 percent off its value. Disappointing earnings results from Intel and Qualcomm also contributed to the 35 percent jump in risk in a two-week period.
The mood swing was accompanied by renewed concerns about slowing economic growth, especially in the U.S., and the risk of a broad recession in Europe.Page 1 of 4 | Next Page