There’s no question that stock of tech companies got hit this week on no real financial developments or performance issues. Except, of course, the election of Donald J. Trump as president of the United States.
Apple shares were down in the five days from $110.03 to about $108.43. Google was down from $795 to $771.56; Facebook dropped from $123.21 to $119.04; Netflix dropped from $124.26 to $114.78; and Amazon was off from $771.60 to $739.01.
Most Wall Street analysts pointed to the Trump win as the proximate cause of the drop, given his rocky history with tech and also Silicon Valley so far. That’s included: A call for a boycott of Apple due to its encryption fight with the government and also his contention that it should make its devices in the U.S.; an attack on Amazon over taxes and, really, founder and CEO Jeff Bezos’s ownership of the tough-on-Trump Washington Post; and opposition to net neutrality regulations by the FCC, which have favored the internet powerhouses, and the possibility of their repeal.
Add to that a hard line on immigration, as well as potentially isolationist trade policies and a myriad of tangles over tech-favored social issues like gay rights. And, most of all, just a fundamental disconnect between the new administration and Silicon Valley, which largely supported Democratic presidential candidate Hillary Clinton.
Of course there’s Peter Thiel, so Facebook (where he is a director) might be safe, along with Airbnb, Palantir, SoFi and other investments he has made in a myriad of tech startups. But most in Silicon Valley have no direct lines into the Trump administration, aside from tweeting congratulatory pleasantries at it in the vain hope of detente, so it will be a rough road for a while until the expected lobbying compromises are made in D.C. over the next year.
And that is precisely what will happen. For all its vaunted liberal ideals of tolerance and meritocracy, tech is big business and it will find a way to live and thrive inside a Trump regime and make all the necessary compromises.
There’s some good things they can get, too — all kinds of goodies for the rich, deregulation of the kind that benefits tech around employment, perhaps, and more. And a more business-friendly and free-spending administration, which will largely benefit banking, defense and infrastructure companies initially, will most certainly trickle down to tech in ways that might not seem clear right now.
But government aid, obviously, is not the way that tech has thrived for so long. While it has used all the levers, most of Silicon Valley has been successful through creating innovative products and services that consumers and businesses use enthusiastically. Those that have not innovated have gotten dinged and those that have are doing well.
That’s why the current stock sell-off is a short-term panic, rather than a real worry. Is it really likely that Trump will target Amazon relentlessly until it is in ruins? It makes for a compelling media story and Trump holds a grudge, but seems unlikely that this is what he wants to spend his time doing as president. As long as the company continues to improve its business in the ways that Wall Street likes, that will be all that matters, and any vindictive attacks on it by Trump will look bad for him and not Amazon.
What investors will need to pay attention to is the overall market — it’s the economy, stupid, and as usual — and how issues with other countries like China and Europe develop. While there will be pressure to make more tech goods in this country, it’d be a small price to pay.
They may feel bad on social media and wring their hands at the fresh daily horrors, but I predict total normalization by those in tech, who can pretzel with the best of them. And then it’s back to business as usual and the tech stocks will rise and fall based on that.
This article originally appeared on Recode.net.