It’s been a difficult two weeks for tech stocks. Despite outward appearances, however, the tech economy is strong, and still growing. But sometimes, markets respond irrationally, and smooth roads suddenly turn bumpy. In this instance, rising interest rates have ignited a selloff.

Runups and selloffs are often fueled by fear. Whether that fear is rational or irrational is immaterial. All that’s needed is a spark.

“In 2020, tech stock valuations were driven by FOMO – fear of missing out. Aggressive investors ignored signs of valuation excess, bidding up stocks with high revenue growth … The GAAP strategy—growth at any price – resulted in expensive stocks, but FOMO kept them rallying,” writes Eric J. Savitz in Barron’s. “But that was then. Ted Mortonson, technology strategist at investment bank Baird, thinks the new tech dynamic is FOGK—fear of getting killed.”

Eric’s article quotes analysts who see dependable value in old-school technology firms like Hewlett Packard Enterprise, HP Inc, IBMCisco Systems and Oracle. I understand that perspective, but I don’t think it’s time to throw in the towel on newer companies -- such as Airbnb, DoorDashSnowflake and Zoom – that are clearly addressing real demand in today’s economy.

I’m a true believer in the wisdom of markets – over the long term. The recent selloff may be a sign of fear, but I do not believe it’s an indication of systemic weakness. The truth is that our world runs on technology, and I don’t anticipate that changing anytime soon. 

As I’ve said and written before, now is the best time to be a technology leader. I’m not advising anyone to ignore fluctuations in the market – I’m just saying that in a time of uncertainty, tech remains a good investment.