Facebook is down 38 percent from its peak. Netflix is down 40 percent. Apple slipped 33 percent, and Amazon 28 percent. Alphabet, owner of Google, is down 19 percent.
The nation’s top-performing tech companies — known colloquially as the FAANGs (Facebook, Apple, Amazon, Netflix and Google) — have led the sharp US market sell-off over the past few months, which has unnerved most people who own stocks. It’s a far cry from last summer, when the question was whether Apple or Amazon would be the first US company to be valued at more than $1 trillion.
Now the question facing the tech industry — and the millions of ordinary investors with disproportionate exposure to tech — is whether the decline represents a healthy correction after years of gains or more fundamental changes that could limit the sector’s upside in the years to come.
Some analysts argue that the tech sector is being hit by some of the same factors pushing down stocks overall, such as interest-rate hikes and the trade war with China. However, the biggest tech companies are also facing new, more enduring doubts about their future — such as whether they’ll be able to use personal data as profitably as they have, whether they’re getting too big, and whether consumers are growing less attached to their platforms.
The implications are significant given tech’s outsize role in the stock market. As of Dec. 24, information technology represented nearly 20 percent of the market value of the Standard & Poor’s 500 index, the most of any sector, according to Howard Silverblatt, senior index analyst with S&P Dow Jones Indices. It was just 15 percent a decade ago. Asset managers such as Vanguard own huge chunks of Apple, Facebook, and other tech companies, which provides an idea of how many people are exposed to these firms through their 401(k) retirement funds and other investment accounts.
‘‘Momentum builds going up and it could suddenly build in the other direction,’’ said David Kass, a finance professor at the University of Maryland.
He argued, however, that most of the sell reflects anxiety rather than fundamentals.
‘‘There’s the psychology of the market, maybe even an element of panic entering investment decisions,’’ he said. ‘‘I still think technology stocks remain the leaders because that’s where the growth is, but valuations have come down, as they should have.’’
Facebook has had the most problems of any of the big tech firms. The social media company, whose stock price peaked in July, was rocked by a major data-privacy scandal earlier this year, when the company confirmed the political consultancy Cambridge Analytica had improperly accessed the personal information of millions of users. The Federal Trade Commission opened an investigation, and earlier this month, the attorney general of the District of Columbia filed a lawsuit against the company for missteps involving Cambridge Analytica.
The social network has faced other controversies, too, leading many analysts to raise questions about a business model based on the monetization of personal data. Also alarming to investors has been the company’s most recent earnings reports, which suggested Facebook’s massive user base may be changing their behaviors: The number of users in Europe and America have flatlined, while the company’s profitability has not been as robust.
‘‘A big part of the concern is that they have lost customer trust — Cambridge Analytica, the election connection, data privacy — that has really weighed down Facebook stock,’’ said Rishi Jaluria, an analyst at D.A. Davidson, a financial services firm.
Facebook did not respond to a request for comment.
Other FAANG companies are dealing with their own obstacles.