Tech stocks have been nursing a new year hangover, pushing the Nasdaq into correction territory. Momentum is building against companies with exciting promises to reshape the world, as investors turn to “value” alternatives such as oil and banking. The tech sector now faces a crunch fortnight as its biggest names report results, including Microsoft on Tuesday, Tesla on Wednesday and Apple on Thursday. They must prove they can thrive in a post-lockdown world where the cost-of-living squeeze is leaving people with less money for tech products and services. “The outlook for the Nasdaq 100 will be much clearer in two weeks,” says Matt Weller, global head of research at Forex.com and City Index. Soft earnings reports or weak guidance could see the index make one of its worst starts in over a decade. Although a hesitant return to normal life has now been jolted by Omicron, smaller growth stocks such as the pandemic winners Peloton and Zoom have been under pressure for months. A near-record number of tech stocks have recently plunged at least 50% from their all-time highs. The technology giants’ shares have had an incredible run, helping the S&P 500’s IT index to deliver blockbuster returns of 33% in 2021. But the sector lost about 10% in January. Anxiety over US interest rate rises hurts the unprofitable tech firms promising big earnings in the future. The Federal Reserve, which meets this week, is likely to raise rates several times this year to tame US inflation, now at its highest since 1982. The year 1982 was also when Time magazine presciently chose the personal computer as its person (or machine) of the year. Then, the notion of a company being worth 3 trillion dollars would have been staggering. Apple soared to the $3tn mark in early January (but has fallen 7% since) and must overcome the problems in global supply chains to continue justifying such a hefty valuation. Analysts predict Apple’s revenue rose 6% year-on-year in the last quarter, beating last year’s record earnings of $111.4bn. Profits could be up 13%. But it still faces a risk of a marked slowdown in momentum, warn Russ Mould and Danni Hewson of AJ Bell – “due to the tough base for comparison caused by huge spike in demand for iPhones, iPads and iMacs in 2020-21 as people worked from home, sought to stay in touch with people they could not meet or fought boredom by looking for things to do and watch online”. After smashing production targets in the last quarter, Tesla could have more to say about the future, with investors and customers keen to hear when long-awaited models such as the Cybertruck pickup and Roadster sports model will hit the road. Interest in both is high, but Tesla’s shares dropped this month after references to the Cybertruck entering production this year vanished from its website. And even if the tech giants hit their numbers, they still face scrutiny. Meta, owner of Facebook, which reports on 2 February, is being targeted by regulators who want to break it up, and the chair of the Federal Trade Commission, Lina Khan, is vowing not to back down. Khan is a competition law expert who published a seminal paper, “Amazon’s Antitrust Paradox”, while still a student. It argued the traditional competition-law framework wasn’t fit to assess the digital giants, so a more expansive one was needed. Amazon and Facebook claim Khan should be removed from antitrust probes because she’s not impartial. But her expertise could be just what’s required to keep Big Tech in check.