5 Battered Technology Stocks That Could Bounce Back In 2019

It would not be an exaggeration to state that tech stocks have been through a rough patch in 2018. Trade war fears, data privacy concerns, GDPR implementation in Europe and rising interest rates have put tech stocks on a roller-coaster ride this year.

The Nasdaq Composite (IXIC), the S&P 500 (GSPC), the Dow Jones Industrial Average (DJI) and the Technology Select Sector SPDR ETF (XLK) have lost 9.5%, 5.4%, 4.2%, and 0.97%, respectively, so far in 2018 (till Dec 14).

Factors That Hit Tech Sector Hard in 2018

One of the major reasons behind the roller-coaster ride of this sector has been growing fears of the trade war. The escalating trade tensions between the United States and China have time and again made tech stocks bleed.

Moreover, the implementation of the General Data Protection Regulation (GDPR) impeded growth in Europe. Further, NAND price crash and the tariffs on semiconductors owing to trade tensions brought no respite.

The troubles in the tech sector do not stop here. User data privacy has been an increasing concern for quite some time now. Tech companies have lately been under scrutiny on growing concerns of privacy breach. This has also been taking a toll on shares of companies like Alphabet and Facebook.

Tech Has Scope to Woo Investors Anytime Soon

Whatever be the situation, technology will always be a dominant element in our lives and this sector has immense prospects to make investors happy.

From digitizing retail outlets with automated check-out technology, modernizing payment systems with rigid cybersecurity measures to revolutionizing health care mechanisms and education with credible data-driven insights, we can safely say that the age of technology is here to stay.

Moreover, escalating demand for sensors and software for autonomous vehicles, advanced driver assisted systems (ADAS), Augmented/Virtual reality devices (AR/VR) and the Internet of Things (IoT) are noticeable growth catalysts.

In addition, high demand for power-efficient as well as high-performance chips, essential for running cloud-data centers and processing massive data by using Big Data analytics, machine learning, and deep-learning tools has been a key driver of technology stocks.

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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this ...

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