Can stocks in the disruptive technology group still continue?

If we measure the returns on various investment assets in the first half of this year, we will find that Disruptive technology stocks They give lower returns than all other forms of assets, and statistics indicate that the returns of investment themes in new technology over the past one year have all been negative, ranging from 20-60%, based on ETF returns. that invests in related stocks

For example, the theme of investing in cannabis businesses is already negative 70%, Cloud Computing is already negative 46%, financial technology or fintech is already negative 50%, e-commerce is already negative 56%.

The picture is different now than in 2020-2021, which saw tech stocks rally sharply and revenue grow from higher usage. But after the spread of the Covid virus subsides The need to use new technology has decreased. Stocks in the traditional group have started to return to generate better returns. causing technology stocks to be sold off

In addition, the fundamentals of the business are likely to become more difficult as startups and technology companies are gradually laying off employees. Even Netflix, which has become a global technology company, has had to reduce its total workforce. To Tesla, which still has to cut some employees despite increasing demand for electric cars.

It means that technology stocks are now being challenged by both the mood in the market that has begun to downgrade this group of stocks and the performance that has begun to deteriorate as well. With the US Federal Reserve starting to do QT or reducing excess liquidity from doing QE, technology businesses that rely on money injections to compete for market share will definitely be affected as well.

However, in my view Technology stocks are not dead or will not survive. Just 1-2 years from now may be a time when growth will return to normal levels from the period during which the Covid outbreak occurred, causing the growth of disruptive technology to grow more than in normal times, coupled with Part of the liquidity in the market comes into speculation.

Although now the lives of people all over the world are starting to return to normal before the Covid outbreak. But the demand for modern technology will continue to grow in line with the trend of the world transforming to be more digital and online. It can be said that new technology is entering the state of Mass Adoption or reaching more and more people on a large scale.

In conclusion, Disruptive Technology stocks are not dead, they have just returned to growing at a normal rate and the stock price has not increased from speculation but from true fundamentals. Like technology stocks during the Dot Com Bubble era, some disappeared from the market but some grew to become large companies today.

From an investment perspective The stock price has dropped to more than 50% in terms of Margin Of Safety starting to look interesting. But please consider it primarily as a long-term investment. Because economic risk factors still exist. Especially the issue of Recession that may occur around the world. If looking at short-term returns, it may not be the answer. But it should be viewed as a long-term investment from 2-3 years or more.