The stock market is unforgivingly selling off tech stocks again today. The Nasdaq Composite index was down 3.1% as of 12:45 p.m. ET. Once high-flying software technologist Confluent (NASDAQ: CFLT) is being especially punished, down 13.3% on the day and now down over 70% year to date.
Today's sell-off in Confluent appears to be a continuation of the dramatic downturn last week after it reported first-quarter earnings. The company actually beat the average analyst's expectations .
However, Confluent is in growth mode right now as organizations look for new tools to manage their cloud computing and next-gen IT infrastructure. To maximize its opportunity to grab market share, Confluent is spending lots of money on sales and marketing, as well as on research and development. As a result, the company is generating ample losses -- free cash flow was negative $58 million in Q1 on revenue of $126 million. With the Federal Reserve aggressively raising interest rates and many investors worrying about the rising risk of a recession, companies that lose money like Confluent are currently out of favor.
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Why Confluent Stock Fell 13% Today