With Amazon.com down 33% this year and Meta Platforms tumbling over 40%, you might expect, or at least hope, the carnage in Big Tech is nearly over. You would probably be wrong, according to Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors.

Suzuki’s outlook for the sector has been correct so far. In early March, the New York-based strategist published a report describing the six classic signs that indicate tech stocks have hit bottom. His conclusion at the time — that if the tech bubble of more than 20 years ago was any guide, the stocks had further to fall — has since been borne out.

Suzuki, whose firm takes a top-down, macro approach to the markets and has US$15.5-billion under management, says there’s further to fall even after the recent declines.

In the wake of the recent volatility, Suzuki revisited his six signs and gave his assessment of where we are now:

Valuations that significantly contract and an IPO (listings) market that goes cold. “I would argue that tech and growth stocks are one of the few areas of the market that are still expensive,” he said. “I’m sure IPO activity is going to slow here.”
Tech and crypto analysts go from being lionised to being viewed as villains. “You are starting to hear some grumblings, but on the whole, I think these ‘experts’ are still viewed as visionaries,” Suzuki said.
There are fewer tech-focused products like exchange-traded funds. “I have yet to hear of significant tech and innovation-focused investment products being shut down,” he said.
You see the cancellation of tech- and innovation-focused TV and news columns. “This definitely hasn’t happened,” he said. “In fact, tech is all the business media is focused on right now.”
People no longer quit jobs to join early-stage start-ups or to trade crypto. “As far as I can tell, people are still joining tech startups in significant numbers,” he said.
The fact that no one will care about reading a report like his when the bubble has deflated. “People continue to open up the article I wrote over two months ago about whether or not the bubble has deflated,” Suzuki said. “That doesn’t typically happen. The fact that you’re reaching out to me about it is, in itself, telling.”

If Suzuki is right, tech investors should buckle up.

“In the history of bubbles, you’ve never seen a bubble resolve itself with a swift 20-30% correction, and then you’re off to the races again,” he said. “Bubbles pervade society and it takes a long time for people to realise that the investments are not going to live up to their unrealistic expectations.” — Suzanne Woolley, (c) 2022 Bloomberg LP