U.S. equities are struggling again on Tuesday as the hits just keep coming for the tech sector. Facebook Inc (NASDAQ:FB) is down another 4%, capping a near-7% loss on Monday, following reports of inappropriate data mining by outside political groups and a government investigation into the company’s practices. Twitter Inc (NYSE:TWTR) is getting hit by criticism from the Israeli government on security concerns.
This is all in the context of overcrowded investor positioning in the sector, with hedge funds and retail traders equally guilty, resulting in massive inflows into the group in recent weeks.
That raises the specter of a disorderly unwind as panicked selling leads to profit taking and a rush for the exits. Here are four big-cap tech stocks to sell now:
Large-Cap Stocks to Sell: Facebook (FB)
FB shares have moved below their 200-day moving average, a level that hasn’t been violated since January 2017. Shares are not yet back to the levels they first reached last summer as the stock has faced down a number of negative headlines including charges of political weaponization, the departure of its chief security officer and now reports that the Federal Trade Commission has opened an investigation into the company’s use of personal data.
When the company last reported results on Jan. 21, earnings of $2.21 per share beat estimates by 24 cents on a 47.3% rise in revenues. The company will next report on May 2 after the close. Analysts are looking for earnings of $1.35 per share on revenues of $11.4 billion.
Large-Cap Stocks to Sell: Twitter (TWTR)
TWTR shares dropped more than 10% after Bloomberg reported that Israel is considering sanctions against the company for online incitement. Not only is the company dealing with these specific headline, but it also sees looming fears that tighter regulations are coming. FB officials are expected to brief various Congressional committees on Wednesday.
The company will next report results on April 25. Analysts are looking for earnings of 11 cents per share on revenues of $606.3 million. When the company last reported on Feb. 8, earnings of 19 cents per share beat estimates by five cents on a 2% rise in revenues.
Large-Cap Stocks Getting Hit: Tesla (TSLA)
Tesla Inc (NASDAQ:TSLA) shares are on the verge of breaking down out of a multimonth consolidation range amid ongoing Model 3 production woes, executive departures and fresh worries about the future of autonomous vehicles after an Uber self-driving car killed a pedestrian.
Goldman Sachs analysts, in a recent note, reiterated a sell rating on worries about output and Q1 deliveries.
The company will next report results on May 2 after the close. Analysts are looking for a loss of $3.22 per share on revenues of $3.6 billion. When the company last reported on Feb. 7, a loss of $3.04 per share beat estimates by 11 cents on a 43.9% rise in revenues.
Large-Cap Stocks Getting Hit: Oracle (ORCL)
Oracle Corporation (NYSE:ORCL) shares are down nearly 9% after reporting good quarterly results dragged down by weak forward guidance. Quarterly earnings rose 20% from last year to 83 cents per share on a 5.4% growth in revenue. Cloud revenue increased 32% to $1.6 billion.
So why is the stock down? Because the revenue beat was driven by a lower tax rate. Moreover, during the earnings call, analysts seemed disappointed with cloud revenue and guidance.
Also, there is a nagging worry that the company waited too long to embrace the cloud, giving companies like Amazon.com, Inc. (NASDAQ:AMZN) and Microsoft Corporation (NASDAQ:MSFT) an early lead and discouraging customers to change platforms.