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On the Cusp of an Epic Tech Cycle?

June 30, 2017

While some are exercising caution when it comes to technology, Wellington Management believes this sector may present long-term opportunity.

Anita Killian, CFA, Portfolio Manager and Global Industry Analyst for Wellington Management


 

If you drive north from Flagstaff, Arizona to the Grand Canyon, cracks in the earth start appearing many miles away. But it’s not until you get to the South Rim and stare into the chasm that you start to understand the true size of it. Today, I am seeing those initial cracks in the earth within the technology sector. 

At the start of 2016, many people were surprised when I said that I thought a truly epic global technology cycle would be well underway by 2018 or 2019. Now, some market participants are turning more cautious on tech. Periods of consolidation or inventory adjustments are to be expected, but any pause in momentum should be short-lived and may provide opportunities to build positions in undervalued stocks, particularly as multiples are currently low.

 


 

All investments are subject to risk, including the possible loss of principal. Foreign investments can be riskier and more volatile than U.S. investments due to the adverse effects of currency exchange rates, differences in market structure and liquidity, as well as political and economic developments in foreign countries and regions (e.g., “Brexit”). These risks are generally greater for investments in emerging markets

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