People are starting to question whether the tech giant is worth the perceived stock value and their future worth with the change in the computing and technology landscape. Metaverse stock recently falling creates a new momentum for the devaluation trend. Just like other sectors and industry got the life cycle, so did the technology and computing sector and industry.
Range of tech stock falling 20 to 50%, as investors move into less risky assets. For the past few years both the public and private market is overvalued for technology companies and crypto. As the world toward global scale change in the business lifecycle, where US Federal reserve has change gear on their monetary policy, investors have begun reducing exposure to risky assets base on future earning potential, where currently remain negative cash flow stock, or believe so it will have more challenging future to come, either more me-too or open source alternative and substitute product.
Even the great companies such as Netflix have recently fallen almost 20%, which is worth USD 45 billion worth of investor value. For the modern world where tech stocks typically dominate the list of biggest companies for now by market value. The shifting fortunes reflect the fact that markets move in cycles, tech and telco companies dominated the market in the Dotcom bubble of the late 1990s, while oil companies, before that consumer business such as Walmart were the leaders a decade ago. Market is now once again believing that the tech stock is over valuation. Since 2022, the combined top 10 tech stocks have shed a combined USD 2 trillion in value, which makes the tech heavy Nasdaq 100 index down 18%. As trends go on, most likely some of the companies will exist in the top 10. What I expect to come in the list, will be health-related companies or insurance.
In the past we have Cisco, for the rise and then decline for the networking equipment, that for the Dotcom bubble in 2000, if you recall. Each 10 years mark a new era, we will see the shift in the market and valuation expectation. As most of the rising great companies that rose in the past may or may not be capable of seizing the next wave of big things, this is why some people believe that the stock market performance reflects the market perception in the aggregate manner.
Mega trend for the open source adoption and the rise of low-code and no-code development platform, make the dependency for the commercial off the shelf (COTS) software less likely and difficult to lock-in some of the established and more smart enterprise customers, where save them billions or at least millions each years for the licensing, make those who depend on the selling premium commercial software facing the challenge for the depend on the old technology compete with the new generation of technology that come almost free in term of licensing. In the past depend on the programmer and developer for the writing the programming code, where it may not be the near future, as we transit toward fourth industrial revolution (4IR) industry 4.0, where artificial intelligence (AI) has demonstrate their power and cable to perform lot of tasks much better than average human in the various areas, be it in the novel writing, chatbot, robotics process automation (RPA), DevSecOps complete eliminate human in the CI/CD seamless automation, and so on. We expect to see more of the role of modern technology enabling the world to quickly get things done with less resources.
Every great company for sure got the past glory to bring them to where they are today. But the world is not operate in static, the dynamic change and better technology invented and let be realistic, you can not expect every companies has all the personnel and talent to unlock the future, the most is they are attempt mobilizing resources to bid on the future they believe will come, and with hope so be the pioneer and seize the first mover advantage in the next wave of big things.
Some choose to be proactive to shape the future, some they are passive react to it. Only in the future when you look back will you know who made the right move and continue to survive or excel in the future and tomorrow’s world.
E-SPIN Group in the enterprise ICT solution supply, consultancy, project management, training and maintenance for corporation and government agencies did business across the region and via the channel. Feel free to contact E-SPIN for your project requirement and inquiry.
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