What awaits the tech sector in 2022?

The technology sector has been the market leader for several years now, and the pandemic has only intensified this trend. However, in 2021, this model has changed somewhat: at the end of December, the Nasdaq index of high-tech companies significantly lagged behind the S&P 500 index, and in terms of total profitability, it roughly corresponded to the Dow Jones industrial index since the beginning of the year.

Trading in the Big Tech sector was volatile, as speculation over SPAC (special-purpose acquisition company) and recently listed public companies gave way to a sell-off of shares of companies considered "winners of the pandemic". Analysts note that their further growth is now seen as much more vague. Moreover, by the end of last year it became clear that the most relevant factors were inflation, a potential rate hike and the general situation around the coronavirus.

So what does the high-tech sector expect in the new year? Experts shared their assumptions. 

• If in 2020 software manufacturers were at the head of the sector, then in 2021 the leadership passed to semiconductors. The high demand caused by the increased electrification of cars, artificial intelligence and computing devices suggests that the boom in semiconductor manufacturers may last into 2022.

• Software companies suffered the most in 2021, as the huge growth rates caused by the pandemic could not be maintained. For example, Zoom continued to grow, but its shares fell by 41% during 2021. Analysts note that in the context of an interest rate increase, the pressure on this sector may increase. 

• The social media sector has become another sector that is facing difficulties in 2021. At the same time, long-term trends in this area, such as paid subscription to online content, remain unchanged. In the new year, everything will depend on the vector of users' attention. 

• Analysts also expect further dominance of FAANG (Facebook, Amazon, Apple, Netflix and Google). These companies have shown significant growth and development over the past year, and all factors only indicate that growth will continue. 

• Another forecast suggests an increase in the number of acquisitions and mergers in the technology sector. If back in 2020 many companies were actively creating collaborations, in 2021 this process slowed down. Analysts note that a slowdown in growth and a still low interest rate may lead to the resumption of mergers and acquisitions. This can especially happen in highly competitive sectors such as software or media.