The biggest piece of news ASX investors woke up to this morning was the massive crash that US-listed tech shares have just had overnight on the Nasdaq exchange.
Just like our ASX tech shares like Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P), Sezzle Inc (ASX: SZL) and Xero Limited (ASX: XRO), US tech shares have been on an absolute tear in recent weeks. Before today, Apple Inc. (NASDAQ: AAPL) shares were up more than 20% int he last month.
It gets better. Tesla Inc. (NASDAQ: TSLA) shares also had a phenomenal month, up more than 50% before last night’s crash.
It’s a similar (although not quite as impressive) story with Amazon.com Inc. (NASDAQ: AMZN) and Alphabet Inc. (NASDAQ: GOOG)(NASDAQ: GOOGL).
So if you were living in the United States, you might be salivating at how these tech shares had such a nasty night last night. Apple was down 8%, Tesla down 9% and Amazon down 4.6%. Overall, the Nasdaq Composite (an index tracking the exchange that most big tech shares are listed on) was down 4.96% last night.
Pity we live in Australia, right?
Well, not so fast. We do in fact have a Nasdaq-tracking exchange-traded fund (ETF) here on the ASX. It goes by the name of the BetaShares NASDAQ 100 ETF (ASX: NDQ). NDQ holds all of the big tech names, including the FAANGs, Tesla and Microsoft. And yes, NDQ units are down 5.62% at the time of writing to $26.53.
Sold?
Should we use this opportunity to buy into the Nasdaq?
Well, first thing’s first, I don’t think we should get too carried away with today’s moves. We investors are very good at forgetting history all too quickly. Yes, last night’s fall in the tech sector was dramatic, and not one we’ve been accustomed to seeing over the past 5 or so months. But it’s also relatively inconsequential. Remember, it was only 2–3 weeks ago that NDQ (and the Nasdaq index) was hitting the levels we are seeing today for the first time. Back then, the ‘Nasdaq was at record highs’. Today, ‘the Nasdaq is plunging’. We’re at the same level people.
After the incredible run up we’ve seen in tech stocks over the past month, a correction was almost inevitable in my view. We are just seeing that play out today. The hype from Apple and Tesla’s stock splits was never going to last forever.
Yes, the Nasdaq has pulled back today. But no, it’s not a raging bargain in my eyes. We just dipped back a few weeks is all.
So if you’re still bullish on the Nasdaq (or Apple, or Tesla) as a market-beating investment over the next decade, by all means, invest at today’s levels. But don’t think you’ve grabbed yourself a bargain just yet!
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More reading
- ASX 200 down 2.75%: Afterpay & Appen sink lower, SKYCITY pushes higher
- 4 ASX shares I’m looking to buy today
- Why the Afterpay share price crashed 9% lower today
- NASDAQ plunges 5%. What next?
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares) and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Apple, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BETANASDAQ ETF UNITS, Xero, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, Apple, BETANASDAQ ETF UNITS, and Sezzle Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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