Facebook Inc (FB), Google Inc (GOOG): Downside Stock Price Pressures For 5 Tech Giants

Microsoft Corporation (NASDAQ:MSFT)

Microsoft is facing a slightly different problem than the rest of the companies on the list. Right now, they’re fighting to remain relevant in a rapidly changing environment. They’ve issued disappointing earnings as consumers continued to move away from desktop and laptop computers, and the company has yet to establish a solid footing in the smartphone and tablet markets.

They dropped Windows 8 on the market, but it’s unclear if that alone will help drive the company to growth. They’re hoping that the Windows Phone 8 operating system is a success, but that’s a tall order when you have to compete with Apple’s iOS and Google’s Android. Microsoft’s Surface tablet has a similar mountain to climb against the iPad.

In other words, Microsoft doesn’t just face short-term issues; it could soon be fighting to exist at all in the new technology sector.

Amazon.com, Inc. (NASDAQ:AMZN)

The internet retailer is a curious story. It has reported several revenue and earnings misses recently, but the stock has continued up on optimism that the company’s operating loss was lower than expected. It continues to trade in short-term profitability for long-term corporate growth, but investors seem willing to wait it out and pay a premium price for the stock.

Amazon’s biggest issue is its valuation, which remains at unsustainable levels. There’s essentially no room for error considering how richly the stock is priced, and any bad news could result in a swift downward path. Most of Amazon’s valuation metrics harken back to the technology bubble of 2000 and we all know how that turned out.