Tech Street
What is Tech Street?
Tech Street is a term which refers to the technology sector, what divides into subcategories, for example, semiconductors, software and gaming, personal computers, data storage, telecom, IT services, internet services, and a large group of others. Tech Street includes companies like Meta (formerly Facebook), Google, Apple, IBM, Microsoft, and Texas Instruments.
Understanding Tech Street
Tech Street, as a term, is modeled on the metonymic uses of terms like Wall Street, Bay Street and Dalal Street for large stock exchanges. Whereas those refer to genuine streets that house the headquarters of stock exchanges in the United States, Canada and India, respectively, Tech Street does not refer to a real location.
Financial news organizations use the term Tech Street in headlines to speak about movement or happenings in the technology sector.
Tech Street and the Rest of the Market
Tech Street is a pivotal sector in the global market place and the financial markets. In this day and age, technology helps facilitate global trade and permits investors to buy and sell securities with the click of a mouse.
Tech Street companies render important services to consumers as well as businesses. Over the years, the range of products and services represented by Tech Street has radically expanded. Today, the technology sector is a large and diverse get bag of industries and includes cloud computing companies, television and home-appliance manufacturers, gaming and app companies, internet companies, and hardware manufacturers.
Four big tech stocks are FANG, comprising of Meta (META), Amazon Inc. (AMZN), Netflix Inc. (NFLX), and Google-parent Alphabet Inc. (GOOG). Jim Cramer of "Distraught Money" coined the abbreviation, and investors frequently compare the performance of FANG with market indexes.
Like the technology sector as a whole, the movement of FANG stocks largely determine the movement of the market. That is, when FANG goes up, the market goes up. When FANG goes down, the market goes down. FAANG is the same four stocks, with Apple Inc. (AAPL) added in.
Example of How Tech Street Got Out of Hand
Numerous new and innovative companies are located in the technology field. This means there are plenty of growth stocks in the space, and therefore, technology stocks tend to trade at high price/earnings (P/E) multiples. While a high PE is one thing, it can get crazy.
During the technology bubble leading into the 2000 stock market peak, many company stocks were skyrocketing, yet the company had no sales, no revenue, and not even a business plan. The Nasdaq Composite rose more than 550% between mid-1995 and the 2000 peak. By late 2002 it had fallen by more than 75%.
Tech street companies are known for introducing sexy new products and innovations. During the 1990s, the allure was the internet and how it would change everything. The internet did radically change things, however a business actually needs a business plan and developing earnings to prosper. The companies without these things ceased to exist
Highlights
- Tech street refers to technology stocks, like how some might refer to Wall street when referring to stocks in general.
- Technology stocks are often at the forefront of innovation, and there a significant number of them will trade at high P/E ratios based on their growth potential.
- Tech street stocks include a wide exhibit of industries including data delivery, internet services providers, wireless communications, and numerous others.
