Australian technology shares fell across the board today after sharp falls in the mega-cap U.S. tech businesses overnight, with the likes of Netflix, Amazon and Facebook all falling between 2%-7%.
Australian investors have followed their lead by sending shipping logistics software-as-a-service business WiseTech Global Ltd (ASX: WTC) 6% lower, while language translation business Appen Ltd (ASX: APX) is down 6.2% and market darling Afterpay Touch Group Ltd (ASX: APT) is down 5%.
Elsewhere software business Altium Limited (ASX: ALU) lost 6%, with Nextdc Ltd (ASXL NXT) down 4.6% and internet business Trade Me Group Ltd (ASX: TME) giving up 6.6% on no news.
The wild price swings show how sentiment can drive share prices higher or lower over the short term, which can provide a buying opportunity for patient investors. Even over a relatively short period of 6-12 months though revenues and profits will determine the direction of a company's valuation.
Some of the above mentioned stocks like WiseTech are trading on unprecedented multiples of sales and as such investors should remember returns are always a function of price paid no matter the underlying quality of a business.
