When might a tech stock suddenly jump or drop in value?
Trading stocks on the world’s financial markets is still one of the most popular choices for traders. Easy to access and simple to understand, there are also lots of shares to buy and many industries in which to invest. Tech is one sector you will have heard of; it includes well-known companies like Google, Apple, and Microsoft.
The key to investing in tech stocks is having some idea of when they might drop or rise in value. Hopefully, you can then buy at the right moment and see a decent return on your capital outlay. For those who want to learn how to trade stocks and need more information, the Ask Traders website is a great place to start. The AskTraders team supplies all the details you need when starting your share trading journey.
But what does drive price movements for tech stocks?
Publication of earnings reports
One reason a tech stock might drop or jump in value could be the publication of the company’s earnings reports. These reports show current information about the company’s finances and specific areas like revenue/earnings over a set period. Earnings reports which fall short of what is expected will see the company’s stock price fall, while a tech company whose earnings report is better than predicted will see its stock price rise.
Overall state of the economy
When it comes to tech stocks, the economy’s overall health also comes into play. This can often be just as important as the financial health of an individual business and have a massive bearing on stock values.
A healthy national economy with positive current economic news means the stock market should perform better, and the companies listed on them see their share price rise. Of course, the opposite is true for tech businesses that operate in a country with a poorly performing economy. Whether it is inflation, quantitative easing, or general market sentiment, the state of a national economy plays its part.
Breaking company/sector news
As detailed financial reports indicate how a tech company’s stock might fluctuate, general news around the business will also have an effect. This could be anything from good news (such as winning awards or launching new products) helping the stock price increase or bad news (such as laying off staff) seeing the share price fall.
Breaking news around the tech sector, in general, can also have an impact. If there are positive stories about how positively tech is doing overall or how well companies in the industry are performing, it will boost tech stock prices. Of course, stock prices will fall if the news is negative.
Multiple factors can see stock prices change
Any trader knows that the key to success is knowing what drives fluctuations in share prices. This is especially true for tech stocks, where investors need to know more about why prices could suddenly move up or down. If you need a helping hand with this, our guide above should help.