What’s Next: Don’t believe the “tech crisis” hype.
Facebook’s PR nightmare, a self-driving car fatality and vague threats of regulation directed at Amazon are fueling a media narrative that the tech industry is headed for a sea-change moment where investor cash dries up and consumer interest cools. Today, Andrew Ross Sorkin asks if we are “witnessing the end of a tech boom.”
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The influential VCs, investors and tech executives I’ve spoken with over the last 48 hours believe the “tech crisis” story is absurd. They say the media is tying together unique setbacks to force a cohesive narrative that, on closer inspection, lacks cohesion:
Amazon stock is down after an Axios report that President Trump “wants to go after” Jeff Bezos. But none of my sources believe the president is actually capable of forcing meaningful regulation on Amazon. Moreover, his attitude toward Bezos has been well-known since before the election — even he says so.
Nvidia stock is down after the company temporarily suspended testing on its self-driving cars in light of the recent Uber accident that killed a woman in Arizona. But none of my sources believe that means autonomous vehicles aren’t in our near-future.
Tesla stock is down due in part to the fact that Elon Musk can’t hit production targets on the Model 3. That is a very real problem for Tesla, but none of my sources believe investors will stop investing in electric car technology.
Facebook stock is down because the company is enduring a very real crisis over very real data privacy concerns. But none of my sources believe those concerns have the power to tank a company with a $450 billion market cap and more than 2 billion users worldwide.
Sentence of the day, from my colleague Paul R. La Monica: “Experts say that the Big Tech stocks should eventually bounce back once investors remember how strong their earnings, sales and balance sheets are.”
Headline of the day, from my colleagues David Goldman and Kaya Yurieff: “Now is a great time to buy Amazon”
The Big Picture:
Silicon Valley is not monolithic.
Washington’s ability to regulate is limited.
The desire for technological innovation endures.