The Afterpay Touch (ASX:APT) share price has tumbled 97 cents or 6.3 per cent lower to $14.50 as high flying ASX tech stocks are following Wall Street lower.
Rising US interest rates is sending shivers through the stock market as higher interest rates slow economic growth and by comparison, can also make bonds and term deposits look more attractive than shares.
In Thursday morning trade, the ASX 200 index has plunged 125 points or 2.07 per cent to 5,924. Though there was no major news out on Afterpay, that pressure in the broader share market was enough to push its shares sharply lower.
Late last month, Alex Waislitz was singing the praises of Afterpay, saying it is an example of an Australian technology company which is expanding globally, having entered the US market during the last financial year and, in recent weeks, a move into the UK.
Goldman Sachs recently retained its buy rating on Afterpay shares and its lofty $26.15 share price target.
The broker said its thinks “Afterpay’s strategy in the US is clear (it’s a very simple product), targeted (specific to Fashion and Apparel) and a strong value proposition (consumers who pay on time get the service for free).”
Afterpay shares are not cheap, and nor are they for the faint hearted. From its absolute high in late August of $23, the Afterpay share price has plunged 37 per cent to the $14.50 it trades at today.
The range of outcomes for Afterpay, and its shares, is wide. Plenty of top performing fund managers like Afterpay shares. It’s rare that an ASX-quoted company has the chance to be a dominant global player in the technology sector.
Afterpay shares might be worth a nibble at these lower share prices. No matter what, expect more volatility ahead.