5 Stocks That Moved the Market in April

Investors took another beating in April when major stock indices lost trillions in value. The S&P 500 decreased by almost 9%, while the Nasdaq composite dropped more than 13%. Corporate earnings reports, fears of an impending recession, rising interest rates and inflation have all played a major role in the winners and losers of the past month. Here are some of the high-profile names that illustrated key trends in the stock market in April.

1. Netflix

Shares of Netflix (NFLX -3.90% fell nearly 50% in April after a disastrous earnings report. For the first time in more than a decade, the streaming content disruptor reported a decline in subscribers. Prior to this announcement, investors were already concerned about slowing growth, and the stock has faced waning momentum from the home trends of COVID-19.

Stocks often undergo major valuation shifts as they transition from growth to value. That seems to be happening as Netflix takes on a more established role in a maturing industry, but there are other factors at play as well. There is a lot of competition from a long list of streaming platforms. There is also concern that consumers are reaching subscription fatigue. That is not good for Netflix’s growth and cash flow potential, and the stock is taking a beating as a result.

Image source: Getty Images.

2. Coinbase

Coinbase Worldwide (CURRENCY -9.20% fell 41% last month, even though there was no earnings news from the company. There was some analyst chatter that impacted the stock with negative commentary about the increasing influence of competition. None of this is exactly news, but headlines like this can certainly drag stock prices down.

More than anything else, Coinbase has been a victim of the forces of the capital market. Investors make money from risky assets, including growth stocks and cryptocurrencies. Bitcoin fell about 20% last month, and many of the smaller currencies and tokens fell even further. Coinbase is a growth stock and its financial results reflect activity in crypto markets. It was the perfect storm for a bad month. The long-term investment thesis didn’t change much for Coinbase. It’s cheaper if you like the business, but the same risks are still there.

3. Amazon

tech giant Amazon (AMZN -1.40% fell nearly 24% last month after a tough earnings report. The decline in this share revealed a number of important economic and market trends at the same time. Like other retail stocks, Amazon is struggling with inflation and margins are tightening. Supply chain issues also continue to cause disruptions. Meanwhile, e-commerce sales are slowing as consumer wallets tighten and people return to brick-and-mortar stores.

As a result of these challenges, Amazon’s first quarter results fell short of expectations, and the company’s full-year outlook has raised major concerns on Wall Street. Even strong performance in Amazon’s cloud services segment wasn’t enough to avoid huge losses amid a sell-off in tech stocks. This could represent a long-term buying opportunity for Amazon bulls.

4. Twitter

Twitter (TWTR -1.11% stood out as one of the few strong performers in the past month. Share of social media increased by almost 27% in April when the news broke Tesla CEO Elon Musk tried to take over the company. Official filings revealed that Musk had become the largest shareholder, acquiring nearly 10% of Twitter’s shares. He then suggested a buyout to keep the social media platform private.

This was a fairly simple situation that had little to do with Twitter’s finances or operations. When publicly traded companies are acquired, the new owners typically pay a premium, so credible news about acquisitions immediately drives shares higher. The deal isn’t quite final yet, so Twitter’s market price reflects the likelihood of the acquisition closing.

5. Nvidia

Nvidia (NVDA) -0.90% fell more than 30% in April, although it reported no major earnings news. It was a tough month for semiconductor stocks across the board with challenging macroeconomic conditions and some worrying earnings reports in the sector. That resulted in some collateral damage for stocks like Nvidia, which were vulnerable due to the aggressive valuation.

Multiple tech companies and market analysts have identified another semiconductor shortage, with COVID-19-related factory closures in China being the latest culprit. Fears of an economic slowdown linked to rising interest rates also threaten this cyclical sector. Many investors who loved Nvidia stayed on the sidelines because the stock has been so expensive in recent years. This could be exactly the opportunity those people had anticipated.

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