Tech

The five biggest tech stocks lost nearly $100 billion in value on Friday

Key Points
  • The Nasdaq had its worst week of the year.
  • Shares of Apple fell nearly 4 percent, while Facebook, Amazon, Alphabet and Microsoft fell more than 3 percent.

Trading Nation: Big drop for Apple, NASDAQ
VIDEO2:3502:35
Trading Nation: Big drop for Apple, NASDAQ

U.S. stock markets punished tech stocks on Friday, and big tech names saw the worst of it.

The so-called "big five" — Apple, Alphabet Class A shares, Microsoft, Facebook and Amazon — lost more than $97.5 billion in market value between the close on Thursday and the close on Friday, according to FactSet, dragging the Nasdaq to its worst week of the year.

Shares of Apple fell nearly 4 percent on Friday, while the other four companies fell more than 3 percent. For most of the day, only 3 stocks in the S&P 500 tech sector were in the green: IBM, Teradata and Western Union. Apple, Facebook, Amazon, Netflix, and Alphabet all traded more than 2 times their 30-day average volume.

It's a rare down day for a sector that's soared this year. The technology select sector SPDR ETF (XLK) is still up nearly 16 percent so far this year, while the information technology sector is the leading gainer in the S&P 500, up more than 18.5 percent.

Cars drive by the Nasdaq headquarters in New York City.
Getty Images

"They're just plain overbought," said David Bahnsen, founder, managing director and chief investment officer of The Bahnsen Group, a private wealth management firm. "They are extremely stretched from a valuation standpoint."

The high-flying sector has made investors jittery with "valuation anxiety," The New York Times noted this week. Goldman analysts wrote that the tech sector momentum "has built a valuation air pocket."

"There is a sense that a lot of investors think there's safety there," Bahnsen told CNBC's "Closing Bell" on Friday. "A lot of managers are afraid to not own these names, and I can understand that."

Still, the Dow Jones industrial index closed at a record high, and the SPDR S&P Bank ETF (KBE) was on track for its best week of the year.

"You just have to wait until these big — I don't know if it's ETF-driven or index-driven — sell-offs create some buying opportunities," Tim Lesko, principal and portfolio manager at Granite Investment Advisors, told "Closing Bell" on Friday.

— Reporting by CNBC's Patti Domm, Chris Hayes, Fred Imbert and Robert Hum.

Disclosure: Lesko's clients own less than 1 percent of outstanding shares of Apple, Oracle and Microsoft. Bahnsen personally owns, or his family clients and firm own, shares of Cisco, Microsoft and Intel.