As many of you would be aware, the tech sector in particular had a “correction-sized” sell-off over the past 3 trading days. I don’t think anyone could be surprised by this given how quickly the sector climbed after the March lows.
That being said, it is evident that the appeal of tech in all it’s forms, is still very much in play. With the behaviour of millions changing (working from home is just one example), many are rethinking how companies will operate in a “digital-first” world and what they’ll need to succeed.
In the 10-Minute Take podcast (click HERE to listen) put out this morning, John Stackhouse interviews Alex Zukin, who covers the software sector for RBC Capital Markets. Alex begins by stating, “Sometimes valuations reach a natural peak and when you don’t have an incremental buyer, they tend to adjust.”
He believes the long-term trends (which the pandemic accelerated), will continue to reshape the economy and benefit many tech companies. During the interview, they discuss shifts in working remotely, online shopping and virtual entertainment. “There’s a natural and generational rethink of the construct of work—from a location-dependent to a location-agnostic paradigm,” he says. As the economy reopens, Alex believes businesses will spend more on technology to capture sudden growth.
I think you’ll find the 10 minutes well worth your while.
Libby
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