Growing concerns over the escalating geopolitical tensions and the potential aggressive interest rate hikes have led to the technology sector witnessing a massive sell-off lately. The tech-heavy Nasdaq Composite closed yesterday’s session at its 2022 low. However, rapid digital transformation and increasing dependency on technology should help the sector rebound soon. According to David Groombridge, VP Analyst, Gartner. "CEOs know they must accelerate the adoption of digital business and are seeking more direct digital routes to connect with their customers."
The Fed's plans to raise interest rates aggressively this year to curb the surging inflation could weigh further on the tech sector. However, according to Wedbush analyst Dan Ives, this might be an opportune time to aggressively own tech names as the sector looks oversold. According to Gartner, worldwide IT spending is expected to reach $4.4 trillion in 2022, increasing 4% from 2021.
