The Technology Sector's 2022 and What It Means for 2023 By Justin Franciscotty

With over 20 years of experience, Justin Franciscotty brings your company proven success in the market and the tech industry. According to Justin, With trillion dollar firms and a positive outlook coming into 2022, the technology sector was already large. Alphabet Inc. (GOOGL) joined the club in the early part of the year. However, the pandemic greatly increased the importance of the technology sector. Justin examine the tech industry's 2022 and what it probably indicates for the performance of the sector in 2023.

The Adoption Acceleration

Although the pandemic had many effects, one of the most notable ones has been an increase in the use of technology at home and at work. Naturally, the needs of those under lockdown and the shift by many businesses to working virtually were what sped up adoption. As a result, the tech industry saw a significant lift, and we can expect those favorable effects to last well until 2022. Zoom Video Communications, Inc. (ZM) usage for internal meetings and happy hours, for example, may decline when there is a more concerted effort to get workers back to the office, but for the trend to fully reverse, too many people have realized that a video call can replace an expensive business trip.

The initial public offering (IPO) boom of Door Dash, Inc. (DASH) probably owed a lot to the idea that conveniences like click and collect and grocery delivery will become habits for customers who have gotten used to them. Consumers are now able and willing to buy larger ticket products like furniture and cars without going to a physical site, reflecting the development of online buying habits beyond shipments from Amazon.com, Inc. (AMZN). Way fair Inc. (W), whose stock has surged more than 180% over the past year, saw triple-digit growth as a result of consumers' greater willingness to buy larger things online.

While most online retailers are doing well, some of the big pandemic winners might not be as well-prepared for a post-vaccine world. One of the tech stocks that the market seems to be utilizing as a benchmark for post-vaccine resiliency is Peloton Interactive, Inc. (PTON). After Pfizer Inc. (PFE) announced a vaccine, the stock fell, but it is now rising as the pandemic appears to last well into 2022. It remains to be seen whether the business can leverage its viral success into a long-term alternative to neighborhood gyms and studios, but it is a significant advantage when the primary rival is being financially ravaged by lockdowns and public apprehension about sharing space.

Digitizing Traditionally Low-Tech Sectors

Traditional low-tech industries have been heavily pushed to adopt digital technologies. In contrast to the private sector, the public sector, for instance, has retained physical documents and in-person interactions to a larger extent. However, there is currently a global movement to digitize public records and move workflows online. Many of the more routine aspects of the public sector, like renewals, certifications, and documentation are being moved online. However, some tasks, like food or environmental inspections, will never be fully digital. Larger tech firms that may submit bids for more extensive service agreements with the public sector are the ones who gain from this trend. Large-scale services in this field are provided by several companies, including Microsoft Corporation (MSFT), Oracle Corporation (OCRL), International Business Machines Corporation (IBM), Accenture plc (ACN), and Alphabet's Google.

These businesses are effectively transforming some of the more complicated aspects of public administration, and they are now applying their knowledge to the ecosystem's interrelated subsectors, such as health and education. For these tech behemoths, the scale of this market and the nature of the longer-term contracts promise a unique opportunity for substantial growth in the coming years.

The Lawsuits

Speaking of tech behemoths, they might spend 2022 dealing with social licensing, a problem that oil and gas corporations are accustomed to. In terms of public relations, 2020 got off to a rocky start for social media companies like Facebook, Inc. (FB) because of the Netflix documentary "The Social Dilemma." The video highlighted how social networking sites aimed to keep users scrolling and clicking in order to increase their revenue, and it effectively conveyed its point by personifying the sites as research labs that experiment on their customers.

To Sum Up

Although 2020 was unpleasant for the majority of us, the tech industry saw a generally positive year. The revenues and business models of the companies providing that technology were similarly impacted by the accelerated adoption of technology. A revenue windfall and momentum going into 2022 are two advantages the IT industry has, which raises the likelihood that the success of the sector as a whole will continue. Investors should be mindful that the social licensing issue with technology has only recently begun to arise in 2020. Justin  find out in 2022 and beyond if the future of technology is one of unrestricted innovation and competition or whether regulation will be introduced to reduce some of the surplus.

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