George Crowdy explains why the technology sector has outperformed in the pandemic and argues that active investment is the key to unlocking this performance.
During the pandemic, many companies have faced profound challenges to their business models and day-to-day operations, yet others have performed well through the pandemic by delivering essential products or services.
One sector that has performed particularly well has been technology as we have all had to find new ways to live, work and entertain ourselves in the initial lockdown. The trend to digitisation that was already underway has sharply accelerated. Along with lower equity discount rates, this has driven the share prices of some ‘big tech’ companies to new highs, pulling stock markets with it. Some are even talking about a new tech bubble.