Tech stocks are on a roll, so what should investors do with the data?
Read more Tech stocks have been on a tear since they took off last year, when Google (GOOG) went public for the first time.
But as Google’s market capitalisation soared, so too did their share prices, which have risen over 50% in the past two years.
The company has been hit with a slew of controversies over the past few years, including its role in the “Google-for-all” Google Glass project, and Google’s self-driving car project, which was scrapped by the company’s main rival, Uber (UBER).
The tech boom has seen a steady rise in the value of the tech sector.
In fact, tech stocks have more than tripled over the last five years, as a share of the global market has grown.
But it’s a bubble that’s unlikely to last forever.
A bubble is defined as a sudden and extraordinary rise in value in a market, which is then followed by a crash or recession.
The last time the bubble burst in a big way was in 2006, when tech stocks were valued at around $100bn.
In the aftermath of the 2007 financial crisis, shares in tech companies plunged, triggering a wave of share buybacks and a dramatic fall in the stock market value.
That created a vicious cycle that drove shares down again.
But in the last few years there’s been a marked increase in the size of the bubble, which has resulted in a dramatic spike in tech stocks over the year to date.
As a result, it’s becoming increasingly difficult to buy or sell a tech stock when the stock price is rising.
And there’s little reason to expect the bubble to burst any time soon.