Industry Voice: Disruption accelerated

The coronavirus pandemic has wreaked havoc across the global economy, and the technology sector has not been immune. Supply chains have come under pressure, and demand for many types of hardware and services has contracted as businesses postpone investment and consumers struggle. We have been meeting and collaborating—more recently, virtually—with the management teams of many of our holdings more than ever before as they seek to adjust to these unprecedented challenges.

But along with challenge has come opportunity—both for companies and investors. Many leading technology firms have continued to grow revenues and profits during the crisis, and some have even seen their stock prices reach new highs. As individuals around the globe work, shop, and consume entertainment at home, companies that provide the infrastructure for the online economy have seen demand for their services boom, allowing them to extend their dominance.

While some of the shift online is likely to reverse as shopping malls, offices, and movie theaters reopen, we suspect that many of the changes we have seen in recent months will remain permanent. Working from home full time will likely become more common, for example, especially now that 300 million people have experienced videoconferencing through Zoom. And many millions more have had their first experiences shopping for groceries online and seem likely to value the convenience even after health concerns have abated. In our view, the current crisis—like many before it—has only accelerated changes that were already underway.

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