Tech stocks have been one of the worst-performing sectors of the market, losing over 20% of their value so far this year. After a 30-year bull run that saw the Nasdaq 100 index gain nearly 4,000%, the tech-heavy benchmark has turned south and is officially in bear market territory. While that's made investors leery of dipping their toes into the sector, particularly when energy stocks have gained over 50% in 2022, now just might be a great time to invest in tech stocks.
For the lucky bunch who invested $1,000 in Apple stock twelve years ago, their investment would be worth $18,400 today. Let's look more closely at the probable causes for Apple's previous performance and consider if investors who buy Apple stock today can expect similarly impressive returns. Apple's dominant performance over the last decade could not have been achieved without the overwhelming success of the iPhone.
Take Roku (NASDAQ: ROKU), LendingClub (NYSE: LC), and PayPal Holdings (NASDAQ: PYPL), for example, each down at least 75% from their highs. Roku may not look cheap from the standpoint of traditional value metrics. Shares are changing hands at 99 times trailing earnings, 64 times free cash flows, and four times sales.