S4 Capital’s Martin Sorrell opines that the Ukraine war could help US firms offering tech services, including cyber offense and defense.
The war in Ukraine could benefit the US tech space, with industry leaders Google LLC (NASDAQ: GOOGL), Meta Platforms Inc (NASDAQ: FB), and Amazon.com Inc (NASDAQ: AMZN) being prime beneficiaries. Speaking in a media session at the World Economic Forum in Davos on Monday, founder and chairman of media firm S4 Capital Martin Sorrell stated:
“I’m very bullish on the tech giants … because the war will have an impact on them. The big three – Google (AKA Alphabet), Meta, and Amazon – will benefit, I think, as a result of the war.”
Sorrell’s comments come amid a recent slump in tech prices over the past few weeks. Although the reason for the decline is pervasive global recession fears, Sorrell explained his thoughts saying:
“Defense means cyber defense and cyber offense so technology and technological companies become really important.”
As it stands, the war in Ukraine seems to be one of a physical as well as virtual nature. This is because hackers on both sides of the Eastern European divide have been attacking each other’s national infrastructure.
Although Sorrell declined to state exactly how the Ukraine war benefits US tech stocks, Amazon, Google, and Meta all claim to have top-notch cyber security systems. In addition, the trio also has cloud computing infrastructure that governments and entities can harness in cyber warfare.
Besides Ukraine Boost, US Tech Stocks Conversely Face Uphill Challenge from Inflationary Threats
The US Federal Reserve has recently been hiking rates to curtail the constant threat of inflation. The increasing rates have sparked conversation around global recession as the prices of goods and services continue to skyrocket.
On the stock side, all three major indexes have faltered in the past few weeks as well. For instance, the tech-heavy Nasdaq Composite retraced 3.8% last week in its seventh consecutive weekly decline. This unsavory development represents the longest losing streak for the Nasdaq in 21 years. As of May 10th, tech stocks had given up more than $1 trillion in value since the Federal Reserve first started raising interest rates.
Also, the Dow Jones Industrial Average (DJIA)recorded its worst daily performance in almost two years in early May. The leading index slumped 1,063 points or 3.12% alongside the Nasdaq which also fell 4.99% on that day to close at its lowest level since November 2020. In addition, the S&P 500 did not fare much better on that same day, retracing 3.56% to 4,146.87. This marked its second-worst day of the year.
The crypto market has also been severely impacted by looming inflation and the accompanying rise in interest rates. Since making an inauspicious start to the beginning of the year, Bitcoin (BTC) and other cryptos have had a series of ups and downs in price. Currently changing hands at just over $30K, BTC rebounded earlier this month to $38,908 ahead of a key Fed meeting. However, since then, the leading crypto has been on a downward trajectory.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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