Although tech stocks ended 2016 on a subdued note, they have started the new year in much better form. The FANG group – Facebook (FB), Amazon (AMZN), Netflix (NFLX) and Google (GOOG) / (GOOGL) – seems to have recovered from losses incurred in the period immediately after the US election, with Facebook already up nearly 9% since the beginning of the year, Amazon and Netflix both more than 6% higher and Google 5% stronger.
Stocks in the technology sector are likely to offer solid investment opportunities in 2017. Money is currently flowing towards finance stocks, and with the Nasdaq Composite currently at record highs, it’s probable that a correction will occur soon. This would represent a good time to back the fundamental strength of the top US tech firms at the most affordable moment.
Some technology companies suffered steep declines in their share prices after Donald Trump’s historic victory over Hillary Clinton, as investors feared a backlash over their perceived bias against the President-elect and their commitment to outsourcing. Others, however, have benefited from the so-called “Trump Effect”, showing consistent growth. Apple appears to be changing course, announcing plans for a high-tech manufacturing base in Arizona and even signalling that iPhone production may return to the US. There could yet be high yields on offers for smart investments in America’s most powerful global tech brands.
According to data from Gartner, the world’s leading information technology research and advisory company, the tech market is expected to grow faster than ever before in 2017, with forecasts for the next 3 years suggesting sustained increases in R&D spending and consumer purchasing.
Trump, meanwhile, is planning to introduce policies that should prove advantageous for all sectors, including tech. His tax cuts for business (from 35% to 15%) would boost incentives for companies to stay in the US. He has also proposed a one-time tax repatriation plan, whereby companies would pay just 10% tax on corporate profits held abroad, rather than 35%, motivating them to return large amounts of capital to the US economy.
In-the-know investors are monitoring the developing situation through online brokers such as UFX.COM, awaiting the right time to make their move. After 12 months of major surprises, 2017 could be the year that the US electronic empire strikes back.
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