Major indexes have recently opened with some of the weakest performances in recent memory, leading to a slight dip in the shares of technology companies. One notable stock that has been on the decline is Apple, which faced a warning from Barclays regarding the sustainability of its gains.
Quincy Krosby, chief global strategist at brokerage LPL Financial, commented on the current situation, stating, "The market is taking a pause after experiencing a significant surge in value. However, some experts believe that there may be a shift in the market's composition. The large-cap tech names are not leading the way as they have in the past. The rationale behind profit-taking in these Big Tech companies is to capitalize on gains for tax purposes."
According to Krosby, investors who chose to sell their tech stocks in December would face substantial tax bills in 2023. However, by selling in January, these holders can navigate the tax implications over the course of this year.
There are also indications that Apple's iPhone sales may be slowing down. Foxconn Technology, a major supplier for Apple, reported a decrease in December revenue, amounting to $14.84 billion, which represents a 29% drop compared to November figures.
On a brighter note, analysts at Bank of America Securities suggest that Nvidia's generative artificial intelligence dominance could potentially result in an incremental free cash flow of around $100 billion over the next two years.