As a sell-off rocks the US giants, is this the end of easy-money Big Tech?

Will tea Metaverse soon or ever be the place to make money?

That’s the question investors have been asking this week, as the outlook for US tech giants betting on this, or any other form of life-changing innovation, suddenly looks a lot less rosy.

For now, Wall Street seems disenchanted with the global “disruptive” technology companies in Silicon Valley or Seattle. In recent days, traders have been selling shares in Meta – owner of Facebook, Instagram and WhatsApp and a leading member of the movement who believes the Metaverse is “fundamental to the future.”

Meta is under pressure for his $69 billion bet on this virtual reality orb — and his ability to counter the threat to Instagram from the TikTok video app. As Chris Ford, head of growth equities at Sanlam Investments, points out, TikTok is not only the world’s largest social media platform, it is also owned by the Chinese.

As Ford points out, the perception may be shifting that America is the only center of innovation worth supporting.

At the beginning of this year, Meta’s market value was close to $1 trillion. Now it’s down nearly $263 billion, leaving Mark Zuckerberg, the boss and largest shareholder of Meta, a little less wealthy than before.

Many British investors have also gotten worse. They include not only those in technology funds and trusts, but also investors with savings in some general funds.

Concerns over Meta’s strategy have exposed the faltering profits of other tech titans.

Shares of Google owner Alphabet have fallen 35 percent this year. Apple stock has suffered less, but, as this column has reported, the iPhone maker is now considered more of a luxury goods company.

This may come as a comfort to those with money in the F&C trust, where Apple is the third-largest holding company and Microsoft the largest. Microsoft shares, which have fallen 33 percent since January, are also owned by Fundsmith, another very popular fund. Should Wall Street’s newfound distaste for technology then signal to British investors to end their relationship with these American names? Tech stocks have thrived, in part thanks to low interest rates and the environment of easy money that is now changing rapidly.

Bestinvest’s Jason Hollands is cautious.

‘We are in a very different environment. The easy money days of quantitative easing gave these stocks a boost. “We’re not going back any time soon.”

If you can afford to do so, you may be tempted to sit back and wait for some relaxation in the current economic and geopolitical turmoil, and share the view of Ford, who claims this week’s defeat was an overreaction. He believes that the admiration for tech companies and their disruptive power in the pandemic may be exaggerated, but the current pessimism is misplaced as the potential for artificial intelligence (Ai) is not yet fully recognised.

AI will be a major focus at Alphabet and Microsoft. They engage with what Ford describes as the more “prosaic parts of the Metaverse,” using it, for example, as a means of sharing manufacturing designs, rather than as a place for avatars to socialize. if you have savings in a technology fund, 90 percent of it will likely be invested in the US, meaning you may not be exposed to innovations hatched elsewhere. China may have already preceded the US, but this is overshadowed by sanctions against its manufacturers.

These considerations should send a signal to anyone willing to participate in the rewards of innovation to cast their net wide.

For example, the Augmentum trust invests in fintech companies that support the digital transition of traditional banks.

This confidence, with a 41 per cent discount to the net worth of its assets following recent industry devastation, is a bet on UK plc. As manager Tim Levene says, 17 of the 24 holdings are British players in a global market that could be worth $12 trillion in a few years.

I will continue to be an investor in F&C, Fundsmith and in the Scottish Mortgage Trust, which has part of TikTok owner ByteDance.

Despite my love for a bargain, I don’t intend to follow the AllianceBernstein brokerage’s advice to shut up and buy Meta, as it seems the disrupter has already been disrupted.