As the tech bubble is bursting now, which sectors (Financials, Industrials, Energy etc.) are likely to be more important in the next 10 years?

As the tech bubble is bursting now, which sectors (Financials, Industrials, Energy, etc.) are likely to be more important in the next 10 years? Thanks.

Comments (31)

  • Intern in Consulting
May 15, 2022 - 2:46pm

Industrials is going to remain important - at the end of the day, we don't live in the metaverse, and we're still going to need physical things always. 

Natural resources will likely be important too - particularly agriculture, as climate change will disrupt farming around the world, making it harder in some areas and easier in some other areas. Plus, there will be more demand for food products as areas in Africa and Asia continue to get richer and increase their caloric intake.

Anything water related as well. Desalination, water filtration, rainwater collection, etc.

May 15, 2022 - 2:49pm
dafftt, what's your opinion? Comment below:

Agreed but I wouldn't discount the metaverse. We do not know how it will evolve, and it can very well lead to wealth generation based on non-intangible goods.

Edit: "non-tangible goods". Didn't see it until southern_cre pointed it out. :)

May 15, 2022 - 4:10pm
FIG newton, what's your opinion? Comment below:

Very little has changed fundamentally. Tech will continue to disrupt legacy industries and now you can get in at lower prices

May 17, 2022 - 3:15pm
Extremely-Boring-Person, what's your opinion? Comment below:

FIG newton

Very little has changed fundamentally. Tech will continue to disrupt legacy industries and now you can get in at lower prices

It'll be more like the next wave of disrupters? I don't think we that we can assume we'll be dealing with the same tech disrupters in the next bubble

  • PM in HF - Other
May 15, 2022 - 10:19pm

As mentioned Tech by far will remain important the fallacy is assuming other industries were not important cause more Tech was more sexy the last while.

Energy for example, has been super important as the abundance of cheap energy drove many other sectors. Issue is many people got stuck in "value traps" and did understand the KPIs of that industry the moment the KPIs changed the entire valuation changed.

  • Associate 2 in PE - LBOs
May 16, 2022 - 9:06am

It's hard to not believe that at current prices (and floor prices), over the next 10 years, the most successful play from now forward will be levered long tech… we are already below what median SaaS multiples "would have been" had they carried in from 2018 at steady state and yet no fundamental shifts away from the SaaS adoption value proposition. Even within software there are still sub sectors with markets that make them about as un-losable as you could want at these prices 

May 16, 2022 - 7:55pm
bands_bands_bands, what's your opinion? Comment below:

I agree. Are you currently putting money into tech stocks? Or waiting for the mess with the fed, war in Ukraine, etc. to clear up?

May 16, 2022 - 7:53pm
bands_bands_bands, what's your opinion? Comment below:

as if tech won't continue to be important? Speculations got out of control during a decade of near-zero interest rates. We are seeing a big correction. Tech is and will continue to be one of the most important sectors in the economy going forward.

May 17, 2022 - 4:05pm
ChanandlerBingo, what's your opinion? Comment below:

Everyone saying "tech", but what is "tech" at this point anyway? Digitalized companies? Companies that pay programmers really well? Silicon Valley companies? Digital infrastructure? Big data? High growth? Software? I think it made sense to use this term back in the 90s, when just having a website meant your company had a very specific business model that greatly differed from the status quo. Nowadays, the term has become meaningless. What makes companies like Apple and Meta close enough that we lump then into one sector? Considering how much tech has become ubiquitous in every day-to-day task, every F500 company could be classified as "tech" now.

It seems to me that there's an implicit agreement that what we call tech companies all have something in common, that we used to be able to define but we can't anymore, yet we can't (or are too lazy to) pinpoint what sector each of these companies belong individually either. So we just say they're all tech and everyone rolls with it without giving much thought.

Yeah, we all know that tech will grow from now on because that's what it has done historically. If you use the term literally and go back like 150 years, tech, as in "technology", meant oil, and we know how much money oil companies founded at the time ended up making.

It's pretty obvious that any companies involved in the early stages of a new technology will be the ones that grow most. But given how long big tech has grown non-stop, I think that from now on, it's gonna take more than throwing money at any random discounted NASDAQ company to outperform the market.

  • Analyst 1 in IB-M&A
May 17, 2022 - 5:02pm

You asked what is tech at this point, answer is all of the above you have mentioned and that's why its so powerful and will continue to be --> because it is a horizontal not a vertical. You are having trouble categorizing because you are looking at it and trying to fit it into a neat vertical but that's the wrong way to look at it. That's the beauty of it, you can provide tech to anything but you can't provide i.e. mining to healthcare. The companies will change ofc, but the sector will always be the most important sector bar perhaps maybe energy with the energy transition.

May 17, 2022 - 7:24pm
ChanandlerBingo, what's your opinion? Comment below:

What do you mean by tech providers? Companies that provide software infrastructure? Many, but not all big techs do that, and not every company that provides infrastructure grows massively. It goes back to the point I made: every F500 company these days can be considered a tech company. That's become a catch-all term that's very little descriptive of what a company does. All we know is that the biggest winners are gonna be the ones that are tech-heavy and highly scalable, but that encompasses every sector. Healthcare? Logistics? Media? Finance? Retail shopping? Food? You can make a tech company in all of these areas, it doesn't mean it's gonna grow like Tesla.

Some sectors will grow insanely because they're gonna bring the right solutions at the right time, some will grow somewhat because there will be some incremental improvement that's part of a steady growth that should take decades, while others will keep moving sideways because the prospects are amazing but it's too soon. It's easy to say "tech" when someone asks what will grow in the next 10 years. But what kind of tech?

May 17, 2022 - 5:19pm
Anchor, what's your opinion? Comment below:

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  • Associate 2 in IB-M&A
May 18, 2022 - 2:06pm

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