How Are Technology Stocks Expected To Perform In 2019?

  • Dec 17, 2018 AEDT
  • Team Kalkine
How Are Technology Stocks Expected To Perform In 2019?

Technology stocks are always one of the most crucial stocks, which the investors prefer to include in their portfolio. If the technology of any company succeeds, there is also an effect on the share price of the company.

If we see the technology stock performance of S&P/ASX 200 Information Technology, the industry wise performance is positive over the past five years. However, there is a slight downward trend in November and December.

Under S&P/ASX 200 Information Technology, amongst 12 favorite technology stocks, there were around ten such stocks which have performed well, and their shareholders have got a positive return on equity. These are Computershare Ltd, WiseTech Global Limited. Link Administration Holding Ltd, Altium Ltd, NEXTDC ltd, Myob Group Ltd, TechnologyOne Ltd, Iress Ltd, Appen Ltd, Bravura Solutions. Most of these companies hold a decent market capitalization. These companies are the key drivers of the technology sector. As per FY2018, these companies have strong fundamentals. They also have a strong positive outlook for the year 2019 and have also given a positive and progressive pretax margin for the past five years.

According to the Global industry classification standard, out of 11 industries, seven industries made a profit in FY2018. These are consumer discretionary, consumer staples, energy sector, health care sector, industrial sector, information technology sector, and material sector. Amongst these industries, information technology sector ranks second with the industry marking a profit of 29.5%. The key driver of the information technology sector was Wisetech Global Ltd. Its share price more than doubled in terms of value this year.

If we consider the technology industry, those companies which are into the business of automation, biometrics, the blockchain, quantum computing are essential to look at in 2019 which will influence the sectoral performance. Other industries might also experience certain change as a result of any change in these technologies. The reason is that most companies even from other industries, opt technology to improve the efficiency of their business as well as their business performance.

As per the innovations in 2018, here is a list of technologies which will drive the technology sector performance in 2019. These technologies will influence both industries as well as customers opting for personal use. These include:

Internet of Things (IoT)- It consists of a network of physical devices which connects various embedded electronic devices through the web and enables data exchange. The object could be any embedded electronics, home appliances, vehicles, software, mobile applications, sensors, etc.

The technologies that were among the popular ones in the year 2018 included the automation, artificial intelligence, augmented reality, 5G wireless, 3D printing, Drones, biometrics, the blockchain, and quantum computing.

These technologies were in trend in the year 2018. Further, there will be more technological advancement and upgrades in these technologies.

The companies that deal in these technologies can expect a brighter future in the year 2019 as well while global circumstances can still offer certain risks as seen lately. Seeing the emerging demand, one can expect that the technology sector will have a better performance in the year 2019. Further, it has to be seen whether this sector will outperform the mining and energy sector, which has also gained momentum towards the end of 2018. Possibilities are that there might be entry of new players in the technology sector, and they will try getting listed on ASX with more advanced technologies.


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