This last week tech hardware companies are seeing sharp increases in their share prices. While I believe this is more of a short term movement in the context of a multi-year expansion, tech hardware has great long-term prospects.
Many market participants have been more focused on the software side of the equation, but high end software development is only feasible with powerful and innovative hardware to host the AI revolution. While software has recently bounced up against social impediments, and the related financial and operational risks, hardware does not have the same exposures. The risk of hardware is to continually keep striding ahead of the competition in light of a fast and continually changing environment.
The near term risk to the hardware segment is their exposure to China and the tariff situation, but long-term, hardware will continue to support significant advances in cutting-edge computing software. My belief is this trend will continue for a decade or more.
Most business, even with the advances of software and hardware of the last 30 years, are still in dire need of more technology that enhances their efficiency and effectiveness.
So the next time you see a price dip with some of the hardware companies, keep your eyes peeled for those financially strong players who are innovative and striding ahead of the pack. It may be a bumpy ride, but those innovators will definitely be climbing. I am definitely keeping my seat and am buckled in for the ride.
