Regulators, meanwhile, can alter the landscape for emerging technologies in the light of events such as data breaches.Īnother point to note is that, in contrast to the ‘old economy’ stock sectors of mining and energy, most technology companies pay minimal dividends.ĭividends are payouts to shareholders made by companies out of their profits. Tech companies are also vulnerable to both disruption and a shifting regulatory environment.įor example, companies with market-leading designs and products can generate big profits but, equally, are susceptible to disruption from new rivals with superior innovations. Stock market investing is far from risk-free and the performance of growth stocks in general, and a number of tech stocks in particular, during 2022 has been testament to that.Īfter a buoyant period stretching over several years, tech companies are now beginning to feel the economic pinch and have issued a string of underwhelming corporate announcements during the first half of this year. Investors have queried whether stocks that benefited from a benign economic environment will be able to continue doing so as both interest rates and inflation rise, and recessionary clouds start to gather.Ĭonversely, investors looking to buy the dip after stock market falls may believe enough negative news is already embedded in the sector and the only way is up.Įither way, to give you a flavour of the tech sector, we’ve profiled a dozen of the largest companies by stock market capitalisation (based on Morningstar figures dated 10 March 2023). However, as more of us have returned to work and spent less time at home, the tech sector has experienced a reversal in fortune.įor example, the tech-heavy NASDAQ index in New York lost around a quarter of its value during 2022 as companies reel from failing to meet earnings expectations. Tech companies thrived during the lock-downs associated with the Covid pandemic, when services underpinned by technology flourished. In investing terms, they tend to be pigeon-holed as so-called ‘growth’ stocks – companies considered to have the potential to outperform the overall market because of their prospects. The majority of the world’s leading tech companies are based in the US. This covers a wide sweep, from computer hardware manufacturers and microchip makers, to social media platforms and companies that provide cloud computing services. Technology – ‘tech’ – stocks include any business that provides a technological product or service. As a stocks and shares investor, it therefore makes sense to have exposure to companies that occupy this important and all-encompassing industrial sector. You should always check with the product provider to ensure that information provided is the most up to date. While we work hard to provide accurate and up to date information at the time of publication that we think you will find relevant, Forbes Advisor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Forbes Advisor. These “affiliate links” may generate income for our site when you click on them. Second, we also include links to advertisers’ offers in some of our articles. This site does not include all companies or products available within the market. The payments we receive for those placements affects how and where advertisers’ offers appear on the site. This comes from two main sources.įirst, we provide paid placements to advertisers to present their offers. To help support our reporting work, and to continue our ability to provide this content for free to our readers, we receive payment from the companies that advertise on the Forbes Advisor site. The Forbes Advisor editorial team is independent and objective.
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