The uncertain macroeconomic environment has weighed heavily on the stock market. With inflation and interest rates on the rise, many investors have sold assets perceived as risky to hedge against the possibility of a recession.
The tech sector has been hit especially hard. The S&P 500 Information Technology index is currently 21% off its all-time high.
Why? Tech stocks are typically valued based on cash flow, and investors have been worried that an economic downturn would stunt growth, making already-rich valuations look even pricier. But the latest earnings results from Zscaler (NASDAQ: ZS) and Salesforce (NYSE: CRM) suggest that logic doesn't hold for all tech companies.
For further details see:
Zscaler and Salesforce Just Gave Tech Investors a Reason to Be Bullish