Why Twilio Stock Fell 20% in June
Shares of cloud communications giant Twilio (NYSE: TWLO) fell 20.3% in June 2022, according to data from S&P Global Market Intelligence. High-growth but richly valued tech stocks, especially those like Twilio that currently generate little to no profit at the moment, have fallen out of favor among investors. As of this writing, Twilio stock is down 68% so far in 2022. By comparison, the S&P 500 and Nasdaq Composite indexes are down a respective 20% and 29%.
The first half of 2022 had the worst start to a year since 1970, but the broad-market indexes only reveal part of the pain many investors are experiencing right now. Twilio is a perfect case in point. The business itself is performing quite well. Organizations around the globe are adopting new cloud-based communications (voice, chat, email, and video, all delivered via an internet connection) to meet modern employee and customer needs. Twilio reported year-over-year revenue growth of 48% (or organic growth excluding acquisitions of 35%) in the first quarter of 2022.
So what's eating Twilio stock? The U.S. Federal Reserve is aggressively hiking interest rates to try and combat inflating commodity prices. It increased its short-term benchmark rate by 0.75% in June, and it's widely anticipated it will hike again in July and September.
Source Fool.com
