Big-Tech Basket

BIG-TECH BASKET

Technology companies have been in the spotlight during 2020. Restrictions put in place by governments to stem the growth of Covid-19 contagions drove the use of electronic devices, necessary for smartworking and distance learning. For interactions with other people instead there has been an increase in the use of social networks, while for purchases we have relied on e-commerce. The NASDAQ-100 has benefited from a decisive rise, while numerous shares in the technology sector have marked new all-time highs in a context in which stocks more linked to the real economy have ended up suffering. With the arrival of vaccines then the situation did not change much, with the tech sector continuing to benefit from purchases and increased sales of their products.

The technology sector in the new normal

More than a year after the start of the pandemic, the long-awaited return to normality still seems to be far away. Masks and social distancing continue to accompany most people, not to mention that many habits have changed: purchases continue to be made online, the start-up of schools has shown that distance learning is far from being abandoned and smartworking is still recommended by Governments. Beyond that, cloud platforms, artificial intelligence, Big Data analytics and cybersecurity are becoming increasingly important. Against this backdrop, it's interesting to look at research from eMarketer to understand the growing importance of electronic devices. From 2014 to 2021, time spent in front of a smartphone by US citizens increased from 2:32 hours to 3:54 hours. This element assumes a particular relevance, since with these phones it is possible to do everything from making payments to shopping on the web. An estimate by the same company also highlights how the growth of online sales will continue to grow, from $4.213 billion in 2020 to $7.385 billion in 2021.

Tech sector: the three main unknowns

Although the technology sector may continue to grow over the next few years, there are a number of uncertainties in the short term, primarily regarding the Federal Reserve's monetary policies. The start of tapering on the purchase program and a possible increase in interest rates could penalize technology companies, which would find it more expensive to finance medium-long term investments. In addition to this, the shortage of semiconductors must be considered, with the supply of microchips unable to meet the huge demand. Some experts point out that this situation could last for several years. Finally, we must not forget the legal issues, with several companies under the spotlight of the authorities for market practices considered potentially unfair.

How to invest in the technology sector

Kimura Trading, in the Big-Tech basket included 5 giants of the American technology sector:

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