The highly valued technology stocks that once rode the Fed's east wind look like a perpetual motion machine for the stock market. From now on, however, the high growth of technology stocks is like a "perpetual motion machine", which is a myth rather than a reality.

Netflix Inc (Netflix) surprised the market in the first quarter, with its global net paying users falling for the first time in more than a decade, while the company had expected to add 2.5 million. As soon as the news came out, Netflix Inc plummeted more than 25% after trading on Tuesday, continued the decline overnight, and fell to 39% at the beginning of the session, the deepest decline in 18 years.

Netflix Inc's setback is a direct drag on peer streaming and technology stocks, with Walt Disney Company and Warner Brothers Exploration both down about 5% overnight, and Metasmos Meta down more than 7%.

Although Tesla, Inc., who is regarded as the "ultimate growth stock", announced higher-than-expected profits on Wednesday, investors saw a slight turnaround and the share price rose 5%, but Tesla, Inc. also stressed that supply chain problems will continue in 2022.

According to Bloomberg, Dan Suzuki, deputy chief investment officer of consulting firm Richard Bernstein Advisors, said:

Behind the high valuations is a strong belief that these companies will continue to achieve unparalleled growth and are likely to be winners. (but) We are beginning to see more and more evidence to question these assumptions.

At present, Netflix Inc's "Waterloo" has aroused concern among investors that it will be difficult for companies like Shopify Inc to hand in satisfactory results in the earnings season. These companies have jointly benefited from demand growth during the epidemic, but now they can only watch the dividends disappear.

Craig Erlam, senior market analyst at Oanda, saidNetflix Inc is prompting investors to reassess many of their ideas for technology stocks.

Erlam says:

With the household budget squeezed, where will streaming services such as Netflix Inc rank if spending is to be cut? . What other technical services are also easy to dispose of?

It's okay to spend a few more dollars a month, but when Americans face their highest currency in 40 years, they have to make some concessions.

Neil Saunders, managing director of data company GlobalData, believes that:

This is a very early signal. With the impact of inflation, people will certainly want to cut back on month after month of recurrent spending, which obviously includes streaming.

But these views have not dampened Wall Street's confidence.

Although the technology-focused Nasdaq 100 index has fallen 14% since the start of the year, including large stocks such as Microsoft Corp and Alphabet Inc-CL C's parent company Alphabet, Wall Street is increasingly optimistic about the profitability of technology stocks.

Many investors are not intimidated and continue to see companies such as Apple Inc as targets for reliable growth, so Apple Inc's share price stood still in the storm on Wednesday and outperformed the S & P 500 this year.