Will tech stocks rally in 2022?
OWill sick tech stocks rally in the coming months, or will investors have to be patient? In this segment of Backstage passregistered on January 28dork contributors Toby Bordelon, Jason Hall and Rachel Warren share their thoughts.
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Toby Bordelon: Rachel let’s go to you. What do you think here?
Rachel Warren: I don’t have a ton to add here. I agree, I agree with Jon on maybe the terminology change. I think it’s just because these VC guys spent so much money last year and so they’re trying to get it on the airwaves of oh my god the tech boom is over and then they can renegotiate these lower valuations. I do not know.
Maybe I’m conspiracy theorizing a bit, but I just feel like it’s part of the game. As far as the tech boom or the innovation boom or whatever we call it, I don’t think it’s nearly over.
You look at all the trends that continue to drive business, that continue to drive the stock market, look at what’s happening in the world. Whether it’s the world of remote work, whether it’s the continued boom in software-as-a-service stocks.
You look at digital innovation and you look at the metaverse if you want to get into that part. It all comes down to technology. I think it’s reasonable, on the one hand, to say, “Okay, maybe some of these companies won’t go back to the premium valuations they had before.”
Some of them, it may take a while for them to bounce back. I think we could see a slight return to some of those slower growing value stocks. But overall I think to say that the tech boom is behind us. I think that just paints a really incomplete picture of where we are.
I think some companies like Rivian and We work which, in my humble opinion, weren’t really worth the price of admission to begin with. I’m not really sure it’s going to be a big boom for investors. I could be wrong. Who knows? Maybe they will be memes. But I think generally speaking, when I think of drawing a circle around all the stocks I see, the most promising stocks, even health stocks like Teladoc who take advantage of technology in the world of health. There is another land for Teladoc. I think it all comes back to this theme of technological innovation.
Jason Hall: Subtle, Rachel.
Rachel Warren: Subtle on the right, I thought you might like that.
Toby Bordelon: You want it broadcast.
Rachel Warren: I want it to air. It all comes down to the theme of technological innovation. I think valuations may be a little bumpy for a while. Maybe some of them won’t perform as well as they used to, but I don’t think that’s behind us at all.
Jason Hall: I think you are right. I just want to weigh in again because there’s a point I wanted to make earlier that I missed. I think we are much more in 2001 than in 1999. What happened from 1997 to 2000.
Imagination and big stories raised capital and no one was making money but like 20 companies. And then what happened? The crash happened, the recession, a war, and then companies made hundreds of billions of dollars over the next 21 years. Here we are and the internet is hosting an internet tv show right now for members who pay us money.
There’s a lot to figure out, and a lot of our favorite companies have made money. They generated income. They may not be profitable. That’s the difference, it was about which ones could scale profitably. I think we’re closer to 2001 right now in terms of the next set of technologies, which Rachel was talking about back then in 1998 or 1999. Toby, I’m going to shut up now.
Toby Bordelon: I always love to hear you weigh Jason so that’s great.
Jason Hall is the owner of Teladoc Health. Rachel Warren is the owner of Teladoc Health. Toby Bordelon has no position in the stocks mentioned. The Motley Fool owns and recommends Teladoc Health. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.