“Load up on tech stock and enjoy the ride of your life” – William Meyer
Tech stocks are re-refuelling and preparing for another lift-off – now is the time to buy! Change may be hard to accept, especially when behaviour patterns are written into one’s DNA over decades. Investors need to accept change now and if they are not moving forward fast, they are going to be sitting ducks! Anybody who wants to survive has to embrace cutting-edge technologies and invest heavily into the new digital revolution.
Satya Nadella, CEO of Microsoft says: “What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry. Building their own digital capability is the new currency driving every organization’s resilience and growth. Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform.”
For me there are some key words in these statements. First, Nadella speaks of a dawn of a second wave of digital transformation. The implication here is that this is just the beginning of this super-trend. Second, we see that transformation is critical for survival. And last, he speaks of Microsoft having the largest and most comprehensive cloud platform – and this I didn’t know. Until now I thought Amazon’s AWS (Amazon Web Services) was the largest in the cloud business, with a 30% share of the market, with Microsoft a distant second.
I do think Nadella is exaggerating his position, but it does point to Microsoft’s serious ambition in this market. Drilling down further into the detail we can see what happens when the PC market experiences its first big growth in 10 years, with 300 million devices shipped during 2020. This pandemic has fundamentally changed the way people work and learn, and most have turned to laptops to continue remotely. The list of technologies adopted by corporations, governments and households continues to grow by the day, and adoption and spending shows no sign of investment fatigue.
The infusion of technology into every nook and cranny of our lives grows deeper and Covid-19 experimentation with the work-from-anywhere phenomenon is going to stick. If you do something for more than three weeks it becomes a habit. We are now well into the second year of Covid-19. There is no way the world is going back to normal. Companies need to better engage digitally with staff, clients and customers. This again requires further investment. Another massive area of spending involves cyber security and data backup as ransomware attacks become more and more common. So finally, anyone who thinks the tech boom is over is very much mistaken. The major tech companies, hate them or love them, are here to stay. Why not come along for the ride?
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