The Megaport Ltd (ASX: MP1) share price had a horror day on the market today.
The tech company's shares plunged 11% to finish trading at $5.22 on Wednesday.
So why did Megaport shares tumble today?
Image source: Getty Images
Megaport share price falls
Megaport shares fell amid a dire day for ASX tech shares. The S&P/ASX All Technology Index (ASX: XTX) fell 3.58%.
Megaport was among the top fallers in the technology index, with Xero Limited (ASX: XRO) sliding 5% and Altium Limited (ASX: ALU) falling 3%. However, the Novonix Ltd (ASX: NVX) share price plunged by even more than Megaport, down 14%.
Fears of the US Federal Reserve hiking rates appear to be impacting technology shares including Megaport. Megaport has a global presence with data centres around the world, including the United States.
Analysts are predicting rates will rise by at least 0.5%, while others are tipping a 0.75% hike. As my Foolish colleague Bernd reported, this would be the highest rise since 1994.
Megaport shares crashed nearly 22% on April 21 on the back of the company's third quarter update. As my Foolish colleague James reported, the company's modest revenue growth of 5% appeared to concern investors.
However, Megaport has recently received some positive broker coverage. Goldman Sachs placed a $13.10 price target on the company's shares in early June. This is more than double Megaport's current share price.
Megaport share price snapshot
The Megaport share price has plummeted 68% in the past year, while it is down nearly 72% year to date.
For perspective, the benchmark ASX All Technology Index has descended 36% in a year.
Megaport has a market capitalisation of about $824 million based on the current share price.
