It has been another disappointing day for the Appen Ltd (ASX: APX) share price on Friday.
In morning trade, the artificial intelligence data services company’s shares are down 5% to $3.09.
This means the Appen share price is now trading at a new five-year low.
Why is the Appen share price at a five-year low?
Investors have been selling down the Appen share price on Friday amid significant weakness in the tech sector.
This follows a very poor night of trade on Wall Street for tech stocks. This led to the tech-focused NASDAQ index falling a sizeable 2.85% overnight, with Apple leading the way with a decline of almost 5%.
In morning trade in Australia, the S&P/ASX All Technology Index is down 2.6%.
What else?
In addition, on Thursday, Facebook’s parent Meta warned that the “macroeconomy remains tough and volatile” and it would aim to cut costs accordingly.
This may have sparked fears that demand from Meta, one of Appen’s biggest customers, could soften in the near term.
And if other tech giants, such as Google, are also feeling the heat from the tough economic environment, demand for artificial intelligence data services from them could also lessen and put Appen at risk of falling short of its guidance for FY 2022.
While Appen hasn’t provided any real guidance, it has advised that it expects the second half to bring higher revenue. Some investors may be doubting that this will happen now based the Appen share price decline today.
Time will tell if that is the case.
