The general of the tech rally breaks a key level

Here is a stat that shocked me on Friday (and it’s only gotten worse this week):

• Half of the Nasdaq Composite is down 30% or more
• 40% of stocks are down 40% or worse
• 35% of stocks are down 50% or worse
• 28% of stocks are down 60% or worse

We’re bordering on a 2000-style implosion in tech in a reminder that companies without profits struggle to find a bottom when the tide turns.

Tesla makes money but its multiple is insane. It’s now down 36% from the November spike high and back at October level. That still leaves it trading at 10x forward sales and 110x free cash flow.

I’m not concerned with valuing Tesla so much as what this chart says about the overall market. There’s no floor on growth stocks and there’s clearly some deep pain being felt in the ‘new paradigm’ trades. Tesla is the top holding of the flagship ARKK fund and Cathie Wood’s bullish calls on Tesla are what made her famous. Yesterday she cleared out of Palantir for a huge loss and piled more int Tesla.

Yet TSLA is down another 4.7% today, breaking below the 2022 low in what could be a gigantic double top targeting $600. You’d hate to wonder where another 27% decline would leave other tech stocks.