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Tech companies still look good

People are right to compare tech IPO valuations with the late 1990s, but established tech companies still have lots to offer investors
Tech companies still look good

People are right to compare tech IPO valuations with the late 1990s, but established tech companies still have lots to offer investors

The recent scramble for tech IPOs has led many to compare today’s goings on with the euphoria and bubble of the late 1990s. There are similarities, but the technology sector in general is not a bubble in my view. While valuations for many established tech companies are high, they are not excessive given their status as innovators and problem solvers for a changing world.

2020 has been a great year for technology shares. The US Nasdaq Composite Index is up 38.6 per cent year to date with the Nasdaq 100 up 42.8 per cent. Some shares such as Tesla (US:TSLA) have seen stunning gains as it has become profitable and defied the short sellers who have bought shares in their masses.

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