Apple Down 25%, Meta 65%, Amazon 49% As Tech Stocks Hit Rough Patch In 2022: 4 Factors That Could Work In Sector's Favor In 2023

Tech stocks just had their annus horribilis. The sell-off in the space was so indiscriminate that most shed billions or millions from their market capitalizations.
The tech-heavy Nasdaq Composite Index has lost almost twice as much as the broader S&P 500 Index, underlining the skewed nature of the market sell-off toward the tech space.
The FAANG stocks, save $Apple(AAPL.US)$ , are down by much more than the Nasdaq Composite as well as the $Nasdaq Composite Index(.IXIC.US)$ . $Meta Platforms(META.US)$ has the worst loss for the year so far in this category, followed by $Netflix(NFLX.US)$ and $Amazon(AMZN.US)$ .
Apple also has had its fair share of problems, especially with the concentration of its production base in China hurting output and shipments.

4 Themes Supportive Of Tech Stocks:
1. Potential Easing Of Dollar Strength: Most technology companies, especially big techs, conduct businesses globally and derive a substantial portion of their revenue in local currencies. As the dollar continued to rise against other major currencies amid the Fed’s aggressive tightening, it shaved some percentage points off topline growth.
2. M&A, Consolidation: Valuations of tech companies are below the past five-year averages, Ives said in a recent note.
This, the analyst said, could lead to a spate of M&A transactions in the space in 2023. The M&A wave has already begun. Tech-focused privateequity firm $Thoma Bravo Advantage(TBA.U.US)$ announced earlier this month a deal to buy $Coupa Software(COUP.US)$
3. Lean, Mean Structures: Industry veterans and analysts blame much of the current predicament on the excesses of tech companies, which bloated their cost structures.
The analysts pointed to Amazon’s flexibility in pushing first-party versus third-party inventory and its Prime offering, Alphabet’s focus on diversifying its revenue streams by developing its non-ad business and Meta leaning toward its AI discovery engine, ad and business platforms as well as its multiyear transition to the metaverse.

4. Supportive Valuations: Big techs alone have lost a combined market cap of $2.5 trillion in 2022, JPMorgan estimates.
The oversold levels typically suggest a rebound may be around the corner. This time around, the upcoming year is fraught with risks.
Consumer tech companies could face the brunt of negativity as COVID-19 tailwinds abate, energy prices rise in Europe and global economic activity slows, Franklin Templeton said in its 2023 technology sector outlook. Valuations are nearing the point, where they have begun to reflect expectations of below-trend growth continuing into 2023, the firm said.
$Tesla(TSLA.US)$ $Microsoft(MSFT.US)$ $Alphabet-A(GOOGL.US)$ $Invesco QQQ Trust(QQQ.US)$ $S&P 500 Index(.SPX.US)$