After stellar gains in the last two years on a pandemic-driven boom, the tech industry has been under pressure since the start of this year. Concerns surrounding overvaluations, a tech bubble formation, and Fed’s hawkish stance, have caused investors to rotate out of tech stocks over the past few months. And due to escalating geopolitical tensions and other macroeconomic headwinds, surging market volatility has caused tech stocks to sink further in price lately. This is evident in the benchmark tech-heavy Nasdaq Composite index’s 19.6% decline year-to-date and 11% slump over the past month.
However, because COVID-19 cases rise again in Europe and several Asian countries, the remote working trend will likely continue globally. And given increased employee productivity and reduced overhead expenses, many businesses have been adopting a hybrid working model as a permanent structure. The increased dependency on advanced technological solutions, such as artificial intelligence (AI), 5G networking, Internet of Things (IoT), and cloud computing is expected to fuel the tech industry’s long-term growth prospects.
