(Bloomberg) -- It was a week of polar extremes for Big Tech, which saw stomach-churning swings that ignited the wildest volatility since the pandemic shuttered the U.S. economy in 2020.

The zaniness of the past five days is hard to exaggerate: The Nasdaq 100 Index, which includes some of the world’s technology behemoths, had its best week since December even after Facebook parent Meta Platforms Inc. posted the worst one-day drop in market value in stock-market history, plunging it into value territory.

But it was hardly a train wreck for tech stocks this week: Amazon.com Inc. shares soared 14% Friday on strong cloud growth, in the biggest single-day gain in market capitalization in U.S. history. On Wednesday, Alphabet Inc. jumped the most in almost two years after the Google parent posted upbeat results, which came on the heels of solid earnings from Microsoft Corp. and Apple Inc. a week earlier.

Investors still have plenty to be on edge about, with the weeks counting down before a widely expected Federal Reserve interest-rate hike. The path of monetary policy amid soaring inflation and the uncertain trajectory of the pandemic are complicating portfolio decisions now, and the size and frequency of the swings in tech shares are beginning to worry analysts.

“These are very difficult waters for people to navigate -- we are dealing with changing monetary policy, tapering, the pandemic, inflation, earnings, and all these issues,” Steve Sosnick, chief strategist at Interactive Brokers, said in a phone interview. “It is much harder to determine what fair value should be for a stock now, and the volatile markets reflect the difficulty that people are having.”

‘Value’ Shift

Shares of Meta collapsed 26% Thursday, wiping out $251 billion in market value and sparking a global tech rout. The company’s disappointing earnings stoked worries that its flagship product and core advertising have plateaued. 

Meta is now trading akin to a “value” stock, one that’s cheap on measures such as earnings or book value, rather than a more expensive “growth” stock. For instance, its forward 12-month price-to-earnings ratio has fallen to about 16, the lowest since the early months of the pandemic and below the S&P 500 Value Index’s for the first time on record. 

Volatility Spike


The diverging earnings reports from Big Tech and growth stocks are fueling the wild swings in U.S. equities and internet shares. The realized 10-day volatility for the Dow Jones Internet Composite Index -- which tracks 42 Internet-related companies -- has surged to the highest level since April 2020. 

Market-Cap Swings

Meta’s slide briefly weighed on major technology, growth and social media names, with shares of Amazon sinking 7.8% on Thursday before its blowout earnings report. On Thursday, Twitter Inc., Snap Inc. and Pinterest Inc. all tumbled, dragging the Nasdaq 100 Index down 4.2%, its worst selloff since September 2020. 

But all three stocks rebounded Friday after upbeat results from Snap and Pinterest eased fears that a slowdown at rival Meta reflected a broad slump for social media companies. 

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