Leading tech stocks such as Facebook, Apple, Amazon, Netflix and Google took a beating last week. But that doesn't mean the tech sector is hurting.
From an investor's perspective, it's an opportunity to buy. Overall, it's just a glitch that highlights the incredible strength and durability of the technology sector. Let's face facts: tech is driving the global economy. You simply cannot point to any other economic sector and see the same level of impact. We live in a world that's energized, connected and elevated by technology. That reality is not going to change soon.
Some observers looked at last week's crash of the FAANG stocks and said, "Okay, the tech bubble has burst." But that just isn't true. It's not even remotely credible. First of all, it's incorrect to refer to the boom in tech stocks as a bubble. That boom has been driven by a combination of healthy earnings and cheap money. Neither of those factors is likely to change soon.
Even though the FAANG stocks represent 10 percent of the market's value, they are still part of a larger market. And the overall market is very strong, for the same reasons the tech sector is strong: good earnings, innovative leadership and low interest rates.
From a purely economic perspective, our jobs in tech are safe. Tech is the place to be. As a sector, we are solid and we are growing. There are job opportunities at every level of the industry, from bottom to top.
That said, we can't afford to become complacent. A venture capitalist I know recently told me that automation would soon eliminate the need for database administrators at thousands of companies. That might or might not be true. But if it happens, I firmly believe that thousands of new jobs would be created to manage the automation.
No matter what you read or hear, automation and artificial intelligence can only support the efforts of people. They do not replace people. Maybe 50 years from now, cognitive computing will have evolved to the point where AIs can operate large chunks of the economy with minimal supervision. But that day is still far away. For now, we still need humans in the loop.
It would be unwise to pretend that tech is invulnerable. Unquestionably, there's been pushback against the FAANG companies from various parts of society. But healthy companies can endure criticism, especially when some of the criticism is fair and constructive.
I believe the tech sector will remain a positive and powerful force in the economy for the next two or three decades. I'm grateful for the role I play in the tech economy. I am confident that we have many years of growth and prosperity ahead of us.