If you had bought Amazon stock in 2015 for $US499, it would be now worth $US3,294.62 – more than six times as much.

In fact, six of the biggest US tech giants – Amazon, Netflix, Microsoft, Apple, Facebook, and Alphabet – have seen their share prices return an average of 352 per cent in the past five years.

When they hit their peak last week, those six companies had an enormous combined market value of US$8 trillion.

Then there was a sudden sell-off.

The tech-heavy Nasdaq dropped five per cent on Thursday and kept falling until an end-of-week rally stemmed the bleeding.

At one point on Friday, Apple’s value had dropped by over US$300 billion in the two-day rout.

Speculation abounded over the cause of the sell-off with some economists suggesting traders merely saw an opportunity to bank some profits provided by the rising tech stocks.

Some cautious fund managers told the Wall Street Journal they were scaling back on tech investments with one investor calling the tech stock climb “really ridiculous” and another adding that momentum was “nice on the way up, but it’s painful on the way down”.

Adding to market uncertainty was the surprise discovery that Japanese tech investment company SoftBank had been making massive bets on US tech firms.

Dubbed the ‘Nasdaq whale’, SoftBank’s multi-billion dollar bets have helped stoked recent interest in the stock-buying uptick which doubters have linked to the infamous dot-com bubble of the late 1990s.

But Senior economist with Capital Economics, Jonas Golterman, told the Financial Times the two technology booms were vastly different.

“Unlike in 2000, the largest tech firms today are highly profitable and their valuations, while punchy, don’t look so obviously unsustainable,” he said.

“So while this correction may well have further to run, and we continue to think that tech stocks will fare less well than most other sectors as the economic recovery continues, we don’t expect that a collapse in tech stocks will drag the entire market down for an extended period in the way that it did in 2000-02.”

Technology companies' stock price performance:


Stock price on 4 September, 2015

Stock price on 4 September, 2020

% growth

























Source: Buy Shares

COVID-19, combined with a dramatic drop in oil prices, triggered a stock market crash in March which saw global markets indices – including the ASX 200 – come down off record highs.

As countries began entering recessions resulting from slides in GDP growth, share prices began to rebound with the big six US tech giants leading the charge.

Technology uptake has increased due to the pandemic with a boost in the use of collaborative and productivity software, online shopping, and video streaming.

It’s a similar story in Australia. While the ASX 200 has dropped 10 per cent in the past 12 months, the All Technology index has grown by 10 per cent since its launch in February.

One of the ASX’s best performers, buy now pay later company Afterpay, which has fallen from its high in late August, has still provided 125 per cent returns for investors in the past 12 months while operating at a loss.