It is not even a question anymore. Tech is here to stay.
In the past eight years, tech corporations have expanded out of Silicon Valley to carve out dominant positions on Wall Street.
And they have been able to do this because of one phenomenal skill: as an industry, tech is brilliant at generating its own consumer demand.
We have seen this time and time again. Mega companies release products that build demand for additional, complementary products. Just look at how quickly consumers of the smartphone adapted to the idea of a smart house.
Video game enthusiasts — previously willing to put up with minimalistic game design — are now eager to fork over $600 for virtual reality goggles like the Oculus Rift.
And this demand for innovation is set to continue, but on a much larger scale, because consumers aren’t the only group hooked on tech — corporations are as well. And this makes recent corporate tax cuts a dream for any tech investor.
Why Corporate Tax Cuts Benefit Tech Investors
We are currently in the middle of a record-setting stock market rally — with tech being a central driving force.
President Trump’s push for corporate tax cuts will free up corporations to improve their existing technology. And that increases the demand for more innovative tech, pushing tech companies to develop new products and take on new customers.
Corporations will focus on cloud computing, improved communication, and smart connectivity — industries that are booming in Silicon Valley. The tech hub is basically salivating.
Investors can expect to see both large and small companies benefit. Many large companies, like Google, already have the technology available for corporations. But smaller companies often offer alternatives for cost-strapped companies.
And There is More Good News…
Multiple factors assure investors that tech is here to stay.
Investors have more faith in tech than they did eight years ago. And even though all sectors are trading at all-time highs after an eight-year stock market rally, tech has the strongest performance.
It is trading at 17.9X expected earnings.
And tech bulls believe this is just the beginning. Tech is ready to keep rocketing upward, buoyed by consumer demand, investor confidence, and corporate deregulation.
So make tech the Apple of your eye. Good times are ahead for both the mega companies and the startups.
