Future of Technology Stocks: Will it continue to grow?

Keywords:

• 2020 sparked outstanding performance in the tech sector, boosting profits, revenues, and reliance on tech companies.
• Artificial intelligence played a key role in advancing tech companies and was a major technological revolution.
• President Trump's economic policies may support companies, especially in the tech sector.

Details:

One of the things that can be noted after 2020 is that technology was one of the prominent heroes of the stage, for many reasons, and in the current article, we will highlight the brilliance of the technology sector's performance through giant technology companies on the one hand, and the impact that these companies had on various fields, in addition to the factors that helped bring about this revolution.

First. The spark of the technology sector's brilliance in the last four years:

Since the start of 2020, health conditions have been a factor in increasing demand for technology, due to the global lockdown conditions that prevailed for many months.

The increased demand for goods and services remotely was a motivating factor for various technology companies to develop their work mechanisms and move to advanced stages in the type of technology used.

This was clear in specific technology companies in their work mechanisms, most notably:

• E-commerce companies.

• Cloud computing services companies.

• Remote communication and contact services companies.

The extent to which this demand is reflected in the profits of specific technology companies can be observed, the most prominent of which are:

Amazon's annual revenues for e-commerce increased from $386 billion in 2019 to $469 billion, a growth rate of 21.7%.

The annual revenue growth of Microsoft, which provided cloud computing services and communication services via the Teams application; Revenues rose from $143 billion in 2019 to more than $162 billion in 2020.

This is a sample of the performance of two of the most prominent technology companies that received remarkable demand during the health problem that began in 2020.

It is also possible to note the extent of the growth in users of the Microsoft Teams application, as the number of users increased from less than 100 million monthly active users to less than 150 million monthly active users at least in 2020, before reaching 320 million in early 2024.

Second. The tech sector's rocket performance in 2022 and how it shapes the future of technology stocks:

If the health problem in 2020 was the first spark for the launch of the technology sector in a remarkable and continuous manner, then the year 2022, specifically in the second half of it, can be described as a major launch.

As in that year, the spark of artificial intelligence was launched by the Microsoft-backed OpenAI company, through its experimental release of the Chat GPT smart chat application.

Microsoft thus opened what was later called by analysts a real revolution in the world of business, economy and industries.

Many companies rushed to adopt artificial intelligence systems in their businesses, and some companies even rebuilt their models based on artificial intelligence.

This was evident in the performance of many industries, heavy, medium to light, in addition to the entry of artificial intelligence into fields other than the economy, such as entering technical fields and other matters.

The importance of what is happening in the world of technology can be indicated through the third and final section of this article, related to the numbers and facts related to technology.

Third. Facts and figures about the remarkable performance of the technology stocks!

We previously talked about the most prominent stations that affected the progress of the technology sector during the past four years, which are:

• The station of resorting to technology due to the repercussions of the health pandemic in 2020.
• The station of artificial intelligence that was launched publicly in 2022.

The following are the most prominent figures and facts that confirm the remarkable progress of the technology sector.

First. The outperformance of giant technology companies over the performance of the technology index:

While the Nasdaq technology index grew by 136% during the years between 2020 and 2024, giant technology companies were growing at huge rates, as shown in the table below:

Figure: the performance stocks of big tech companies (2020-2024)

With the average growth of these giant companies, we note that their average revenue growth has reached 523%, which significantly exceeds the progress in the Nasdaq Technology Index.

As for artificial intelligence, statistics indicate that the artificial intelligence market may reach 184 billion US dollars in 2024.

Expectations indicate that this market will continue to grow at a compound rate of 28.45% by 2030 to reach 826.70 billion US dollars.

The United States of America, as a global comparison, is expected to be the largest market in the world at the end of 2024, with a value exceeding 50 billion US dollars.

Will technology stocks continue to grow as a result?

Based on the information and facts related to this topic in the field of technology in general and artificial intelligence in particular during the past four years, some important questions may come to mind, most notably:

• Will technology stocks continue to grow?
• Is it time to invest in technology stocks now?

The above information confirms the continuous upward trend in the value of technology companies' stocks, which reflects their clearly growing financial performance.

It is also possible to note the extent to which artificial intelligence is integrated with various economic sectors, including industries, services, and others, which have become part of the work.

It is also possible to note the foreign investments that are accelerating towards this industry, as announced by the Japanese SoftBank Group and its openness to increasing its investment in OpenAI, the owner of the GPT chat application, from half a billion to one billion US dollars at the beginning of the year.

In addition, the policy of US President Donald Trump holds the company responsible for the company, which is a resource for the environment and cannot be responsible for these companies in the face of a new era of progress.

Based on the above, monitoring the performance of technology companies in the first place, and reviewing all strategic or joint investment news related to them, in addition to following the regulatory standards for the performance of these companies, can be the most prominent gateway to determining the optimal choice regarding investing in these stocks on the one hand, and knowing the new horizon that these stocks may be heading towards.

References:

Amazon Revenue 2010-2024 | AMZN | MacroTrends

Microsoft Revenue 2010-2024 | MSFT | MacroTrends

Microsoft Teams Statistics - By Revenue, Demographics, Usage (2024)

Artificial Intelligence - Worldwide | Market Forecast

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