The tech sell-off many people have feared is underway, and the so-called "FANG" stocks are biting back.

Last year, investors piled into shares of Facebook, Amazon, Netflix and Alphabet (Google), spawning the "FANG" moniker. This year they are pulling out of them.

Shares in Amazon and Netflix are both down by about 28 per cent in 2016. Facebook is down 5 per cent, despite its stunning earnings last week, and Alphabet (the company formerly known as Google) has shed 9 per cent.

The tech-heavy Nasdaq bourse has fallen by 14 per cent in 2016 alone, and is lurching towards bear market territory.

Atlassian, Australia's Great Tech Hope™ hasn't escaped the carnage, despite last week's strong-looking maiden result. Its shares sank by 11 per cent this morning and the stock is now down 35 per cent since the company's triumphant IPO in December (which increasingly looks well timed).

What has happened to change people's minds so dramatically?

"It seems we are going through a phase of re-rating," says Arnhem Investment Management portfolio manager Theo Mass. "It's not just the tech stocks, it's basically everything with a P/E [price to earnings ratio] higher than the market."

The top worries for investors at the moment are slowing growth in China, the weak oil price (which could hurt employment and spending in the oil and gas industries) and the US Fed raising interest rates. Internet stocks shouldn't be affected by the first two of those -  many US internet giants are actually blocked from doing business in China.

For one possible answer, look to LinkedIn.

Shares in the corporate social network were absolutely smashed last week, cutting its market value in half. This extraordinary decline came after LinkedIn reported stronger than expected results last week, and forecast revenue growth this year of around 20 per cent.

That sounds impressive, but it's actually much slower than the company has achieved in the past, and it's causing investors to rethink their growth assumptions for the entire tech sector. After all, LinkedIn, broadly speaking, makes money from job postings.

"I think LinkedIn was the catalyst, and LinkedIn is often viewed, rightly or wrongly as a leading indicator for hiring in the tech space," explains Montaka Global portfolio manager Andrew Macken.

"A lot of investors are extrapolating its slowing growth to mean the tech sector more broadly is not growing at a rate that was previously expected."

It's might be bit of a stretch to draw this conclusion from a single earnings report, but investors tend to latch on to things that confirm a narrative when they get nervous.

There's also every chance that this is a temporary blip and that at least some of these internet stocks, the ones with structural advantages and genuinely booming businesses, resume their upward trajectory

"It really is a matter of how much the market is willing to pay for growth" says Maas. "I'm not reading too much into it," he says of the tech selloff.

"The fundamentals are really shown in the recent results, and they vary from company to company."

Ultimately, when dabbling in stocks with high earnings multiples you have to take the rough with the smooth. They tend to appreciate and decline just as rapidly.

"Many of these tech stocks had valuations that implied enormous levels of growth for a sustained period of time," says Macken.

"And if there is any event that serves to undermine those expectations in any way, then those multiples can contract every sharply."