Why the Afterpay (ASX:APT) share price is tumbling today

The ASX 200 is pushing 1.5% higher on Thursday so why has the Afterpay Ltd (ASX: APT) share price tanked 5.7%?

| More on:
A man recoils from his empty wallet in horror, indicating a major share price fall.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Afterpay Ltd (ASX: APT) share price has struggled in the new year, falling almost 10% in just the last two ASX market sessions. 

Tech-heavy Nasdaq selling off 

The Nasdaq Composite (INDEXNASDAQ: .IXIC) has fallen 0.61% despite the S&P 500 Index (INDEXSP: .INX) and Dow Jones Industrial Average (INDEXDJX: .DJI) pushing a respective 0.57% and 1.44% higher. 

The broad weakness in the tech sector is likely a result of changes in the balance of power in US politics. With the Democrats taking control of the Senate raising the threat of increased regulation. 

For two years, a Republican-controlled Senate bottled up a vast majority of legislation coming out of the Democratic-controlled House of Representatives. The control of the Senate will now spell good news for incoming President Joe Biden's agenda on issues including healthcare, the environment, government reform and the economy. 

Experts see this victory as a potential broad rotation away from tech shares into more cyclical sectors such as banking, consumer staples and materials, similar to what the market experienced during November last year. 

S&P/ASX Information Technology (ASX: XIJ) follows suit

The S&P/ASX information Technology index has followed suit with sharp losses today, down 3.15% at the time of writing.

Some of the best performing ASX 200 tech shares from last year, including Xero Limited (ASX: XRO), Zip Co Ltd (ASX: Z1P) and Afterpay have struggled the most today. But taking a look at the bigger picture, the Afterpay share price ran more than 300% in 2020. 

The broader market is following the US, with the ASX 200 gaining 1.65%, at the time of writing, and more cyclical sectors such as financials, energy and materials running much higher. 

The Afterpay growth story in 2021 

Despite the Afterpay share price tanking this week, the company has a number of promising plans for the year ahead. This includes the pending approval for the acquisition of Pagantis in Europe and development of a strategy to tackle the South Asia market. 

Big brokers have also been bullish for the Afterpay share price, with Credit Suisse initiating a $124.00 price target in early December of last year. The broker anticipates a strong growth outlook to underpin strong financial performance and investor returns. 

Should you invest $1,000 in Xero Limited right now?

Before you buy Xero Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Xero Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Xero and ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX shares returned to positive territory this Tuesday.

Read more »

Multiple percentage signs in the palm of a man's hand.
Share Market News

ASX 200 lifts on the RBA's latest interest rate call

The ASX 200 is up 0.5% on the heels of the RBA’s interest rate announcement.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Broker Notes

Macquarie tips 40% upside for this ASX 200 real estate stock

Let's see what the broker is saying about this stock.

Read more »

Woman sits at her desk working at night, while traffic flows on a busy freeway out the window behind her.
Broker Notes

Transurban shares: Buy, hold, sell? Here's Macquarie's recommendation

Macquarie’s analysts just ran their slide rules over Transurban shares. Here’s what they found.

Read more »

A woman sits at her home computer with baby on her lap, and the winning ticket in her hand.
Consumer Staples & Discretionary Shares

Which 'enduring high-quality business' has become a forgotten ASX 200 stock?

Fundie says this ASX 200 consumer discretionary stock has been flying under investors' radar.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

Want a financial stock outside the big 4 banks? Macquarie tips 15% upside for this small cap financial

For those searching on the edges, this name could be worth a second look according to Macquarie.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Kogan, Monash IVF, OFX, and ResMed shares are falling today

Why are these shares taking a tumble today? Let's find out.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Share Gainers

Why Breville, Clarity, EOS, and TechnologyOne shares are racing higher today

These shares are having a strong session on Tuesday. But why?

Read more »