Tech stocks in focus

WHAT goes up must come down. In the case of tech stocks the world over, this adage is proving to be true.

Tech stocks in the US, which saw highs after highs last year, are now seeing regular selldowns. Taking the cue from the country with some of the world’s biggest tech firms, tech and tech-related companies everywhere else are also seeing their stocks slump.

The negative sentiment has not spared local firms.

Over here, companies like KESM Industries Bhd, Inari Amertron Bhd and Globetronics Technology Bhd have been pounded badly in recent weeks after having enjoyed good runs earlier.

KESM, for one, is trading at a multi-year low.

The main reason – cooling growth prospects of tech giants and all companies within the supply chain.

In the US, major tech firms have issued a cautious guidance for future earnings, adding to their stock volatility.

For the most recent quarter, heavyweights Amazon and Google parent Alphabet reported disappointing numbers. And the markets punished them for it.

Still, analysts tracking these companies say their fundamentals remain sound and point out that despite missing out on expectations, the firms still showed commendable profits.

Perhaps, it is good that tech stocks in gen- eral are seeing a fall in their prices as some are trading at exorbitant price earnings multiples.

If one is a believer that the future lies in all things technological, then now could be a good time to start accumulating some of the sector’s stocks.

That said, timing is crucial in stock-picking and in the current volatility of markets, one must remember the other adage – catching a falling knife – and how to avoid this.