The Year Tech Took Over

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MARC ANDREESSEN, THE famed venture capitalist, coined a phrase several years ago: “Software is eating the world.”

In 2020, software’s appetite seems to have picked up.

The pandemic has sped up already extant tech trends, accelerating the adoption of some technologies by years in a matter of months. On top of that, technology stocks have been incredibly resilient in one of the worst economic environments the United States has ever seen.

Through the close of trading on May 19, the Dow Jones Industrial Average had taken a 15.2% year-to-date hit. The S&P 500 Index, considered an even better metric of how large U.S. corporations are faring, was off 9.5%.

The tech-heavy Nasdaq, for its part, in a year in which more than 36 million people filed for unemployment in just two months, was actually up 2.4%.

Here’s a quick look at how and why the pandemic has benefited the tech sector in 2020 – and, on the investing side, whether a longer-term, secular shift into tech stocks may be underway.

Tech Acceleration
Perhaps the most striking quote out of Silicon Valley about the impact the virus has had on business came from Microsoft (ticker: MSFT) CEO Satya Nadella, whose 11-word commentary on recent quarterly results says it all:

“We’ve seen two years’ worth of digital transformation in two months,” Nadella wrote in the earnings report.

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