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Highlights
- Technology stocks underperform when inflation is high as borrowing becomes expensive which leads to lower valuations for stocks.
- The UK government has recently announced funding of £23 million to create 2,000 scholarships in data science and Artificial intelligence (AI).
Inflation in the UK has increased to 5.5% in January making it difficult for technology companies to grow. Historically, technology stocks underperform when inflation is high as borrowing becomes expensive, which leads to lower valuations for stocks.
The UK government has recently announced funding of £23 million to create 2,000 scholarships in data science and Artificial intelligence (AI) across the country. The move will allow people from underrepresented groups including people with disability and colour and women to get tech jobs even without prior experience.
The UK is one of the frontrunners for private venture capital investment into AI companies and houses almost 33% of total AI companies in Europe. The scholarship will support more people to start a career in AI and will close the digital skills gap and diversity caused by labour shortages during the past two years.
The UK government is also encouraging businesses to play their parts by match-funding the AI scholarships for the conversion courses as it could help more people to start their career in AI and data science, which will strengthen their businesses.
Let’s take a look at five FTSE tech stocks:
- Kin and Carta Plc (LON: KCT)
Kin and Carta Plc is a global digital transformation consultancy that combines deep industry expertise, world-class engineering, seamless delivery, and data- intelligence to make the transformation process possible. The company recorded net revenue from continuing operations of around £85 million in the first half ending 31 January 2022 and Adjusted operating margin from continuing operations improved to c.7% in H1 FY22 from c.3% in H1 FY21.
Kin and Carta Plc’s shares were trading at GBX 242, up by 1.26%, at 9:40 AM (BST) on 17 February 2022. The current market cap of the company stands at £416.40 million as of 17 February.
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- Avast Plc (LON: AVST)
FTSE 100 constituent Avast Plc is the world’s leading cybersecurity provider. It allows its customers to control their privacy as per their wish through Avast AntiTrack, Wind Family Protect, Avast Family Space, Avast Omni, Avast SecureLine VPN, and Avast Secure Browser.
Avast Plc’s shares were trading at GBX 622.60, up by 0.13%, at 9:40 AM (BST) on 17 February 2022. The current market cap of the company stands at £6,465.49 as of 17 February.
- Computacenter Plc (LON: CCC)
FTSE 250 constituent Computacenter Plc is a multinational provider of computer services to public and private sector customers. It allows its customers to source, transform, and manage their technology infrastructure to deliver digital transformation.
Computacenter Plc’s shares were trading at GBX 2,742, down by 0.36%, at 10:15 AM (BST) on 17 February 2022. The current market cap of the company stands at £3,376.37 million as of 17 February.
- Sage Group Plc (LON:SGE)
FTSE 100 constituent Sage Group Plc is a multinational software company. In early February, the company announced that it has launched and priced a bond offering of £400 million 2.875% notes, which is due in February 2034.
Sage Group Plc’s shares were trading at GBX 687.60, down by 0.06%, at 10:20 AM (BST) on 17 February 2022. The current market cap of the company stands at £7,003.38 million as of 17 February.
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Auction Technology Group Plc (LON:ATG)
FTSE 250 constituent Auction Technology Group is an operator of the marketplaces for curated online auctions. Recently, the company had announced the appointment of Suzanne Baxter and Tamsin Todd as members of the Audit Committee and a member of the Remuneration Committee.
Auction Technology Group Plc’s shares were trading at GBX 933, up by 0.32%, at 10:30 AM (BST) on 17 February 2022. The current market cap of the company stands at £1,120.71 million as of 17 February.
Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
