The Tech Trade is Back: Driven by AI Craze and Prospect of a Less Aggressive Fed

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How the tech industry is experiencing a resurgence in the wake of new trends

When Silicon Valley first burst onto the scene in the early 2000s, it was seen as the epitome of innovation and growth. Companies like Google, Apple, and Facebook were dominating the market, generating billions of dollars in revenue and creating new technologies that were changing the way people lived and worked.

However, in recent years, the tech industry has seen a bit of a slump. Investors have grown wary of expensive startups that show little profitability, and concerns have been raised about the industry's role in politics and social issues.

But now, it seems that the tech trade is back, and it's being driven by two factors: the excitement surrounding artificial intelligence (AI) and the prospect of a less aggressive Federal Reserve policy.

AI Craze

AI has been around for decades, but recent advances in machine learning and neural networks have made the technology more powerful than ever. Companies are using AI to automate tasks, improve customer service, and even develop new products.

One example of this can be seen in the healthcare industry, where AI is being used to diagnose diseases more accurately and efficiently. According to a report by Frost & Sullivan, the AI healthcare market is expected to reach $6.6 billion by 2021.

Another area where AI is having a big impact is in the automotive industry. Companies like Tesla are using AI to develop self-driving cars, which could potentially revolutionize the way people travel.

These examples demonstrate the enormous potential for AI to transform industries and create new opportunities for investors. In fact, according to a report by MarketsandMarkets, the AI market is expected to grow from $21.46 billion in 2018 to $190.61 billion by 2025.

Prospect of a Less Aggressive Fed

Another factor driving the resurgence in the tech industry is the prospect of a less aggressive Federal Reserve policy. In recent years, the Fed has raised interest rates in an effort to control inflation, which has made borrowing more expensive for companies.

However, many experts believe that the Fed will take a more relaxed approach in the coming years, which could make it easier for companies to borrow money and invest in new technologies.

This prospect has already had an impact on the tech industry, with companies like Amazon, Microsoft, and Google all seeing their stocks rise in recent months. In fact, the tech-heavy Nasdaq composite has gained more than 12% in the first two months of 2021.

Conclusion

So what does this all mean for investors? Here are three key takeaways:

As the tech industry continues to evolve, it is important for investors to stay informed and aware of new trends and technologies. By doing so, they can position themselves to take advantage of new opportunities and reap the benefits of a resurgent tech trade.

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Curated by Team Akash.Mittal.Blog

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