5 Tech Stocks that Aren’t Crashing | Summary and Q&A

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May 16, 2021
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Let's Talk Money! with Joseph Hogue, CFA
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5 Tech Stocks that Aren’t Crashing

TL;DR

Despite the recent crash in tech stocks, some sectors within the tech industry have been performing well and may continue to outperform in the face of challenges. Investors should be cautious of the potential risks associated with overexposure to tech stocks.

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Questions & Answers

Q: Why have tech stocks been crashing recently?

Tech stocks have been crashing due to a combination of factors, including concerns over higher interest rates and rising inflation. These factors affect the valuation of tech stocks, as higher rates discount future cash flows and inflation erodes purchasing power.

Q: Are there any tech stocks that have been performing well despite the crash?

Yes, some sectors within the tech industry have been performing well. Business-to-business (B2B) tech companies, such as HP Enterprise, IBM, and Cisco, have shown resilience and continue to perform positively.

Q: Should investors be concerned about the crash in tech stocks?

Investors should be cautious about having too much exposure to tech stocks, especially high-growth and high-PE stocks. Diversifying their portfolios and considering other sectors can help reduce risks associated with a potential further decline in tech stocks.

Q: What are the potential risks associated with investing in tech stocks?

The risks of investing in tech stocks include overexposure to a volatile sector, potential regulatory challenges, competition, and the uncertain impact of economic factors such as interest rates and inflation. Investors should carefully evaluate these risks and consider a balanced portfolio approach.

Summary & Key Takeaways

  • Tech stocks, especially high-growth and high-price-to-earnings (PE) stocks, have been experiencing a crash recently.

  • However, certain sectors within the tech industry have shown resilience and are still performing well.

  • Investors need to be cautious about having too much exposure to tech stocks and consider diversifying their portfolios.

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