Rapid digital transformation, rising adoption of cloud-based services, big data storage, analytics and security, AI, and automation have all helped the information technology (IT) services industry thrive since the onset of the COVID-19 pandemic. Overall IT spending increased 9% in 2021. This year's expected increase in IT spending and the growing need for cost-efficient consulting, data processing, outsourcing, transaction processing services, and software support should keep driving the IT services industry’s growth. The global IT Services market is expected to grow at a 7.7% CAGR to $1.51 trillion by 2026.
Although tech stocks have been suffering immense volatility owing to investors’ concerns over forthcoming interest rate hikes, demand for IT services should help the industry regain its momentum in the long run. Investors’ interest in this space is evidenced by the Fidelity MSCI Information Technology Index ETF’s (FTEC) 14.6% returns over the past nine months versus the SPDR S&P 500 Trust ETF’s (SPY) 7.2% gains.
