Don’t look now, but suddenly the business of running software in the cloud doesn’t look like as good an investment as it did as recently as six weeks ago.
As the markets have fallen, so have the valuations of the 37 publicly held cloud software companies tracked by Bessemer Venture Partners in its Cloud Index. The value of the index has dropped by 26 percent in the last six weeks.
The index includes well-known cloud software companies like Salesforce.com, Workday and Netsuite, but also LinkedIn, the social network for professionals, and companies that have recently completed IPOs like Marketo and Tableau Software. The firm launched the index last year.
In a blog post today, Bessemer’s Byron Deeter observed that the value of the index peaked on Feb. 27 at $183 billion, but is now down by 12 percent in 2014.
Here are a few examples: Shares of Salesforce.com, which makes up a big portion of the index as it’s the biggest cloud software company, are down by nearly 18 percent since late February. Shares of Workday have come down by about 35 percent. Shares of Netsuite have declined by about 32 percent. Shares of ServiceNow are down about 27 percent. It’s worth noting, however, that several cloud stocks are rallying today.
But don’t worry. It’s not as though the demand for applications that run in the cloud is getting soft. Cloud companies are just volatile and tend to experience price swings that are out of proportion with the broader markets. As Deeter put it: “Their multiples tend to expand more during a rally and compress faster in a down market, amplifying the market oscillations in both directions.”
Here’s a screen grab of the main chart showing the index’s progress since 2012. You can download spreadsheets with the latest numbers here.
This article originally appeared on Recode.net.