3 Best-in-Class Cloud Stocks Down Over 20% in This Correction
One reason to be optimistic even in the recent brutal tech sell-off is that the correction doesn't have anything to do with company fundamentals. Most leading cloud software-as-a-service stocks are reporting torrid growth this earnings season and quickly becoming must-have applications for the new data era.
The sell-off is rather largely a function of inflation fears and of switching to "reopening" stocks, cyclical stocks, and even bonds, forcing investors to sell some tech winners -- up big over the past year -- to fund purchases even in these new areas.
It's hard to say how long this correction will go on and how much of last year's big gains will be given back. Federal Reserve Chairman Jerome Powell has said that even if inflation spikes a bit this year, the effect may very well be temporary, since interest rates have been low for a decade and inflation has been absent. That could set up a scenario where high-growth tech stocks continue to fall this year but then resume market leadership after the post-pandemic "bump" subsides.
Source Fool.com
