Europe technology companies may not have splashy names like Facebook, Snap and Amazon and may not command the market value that their U.S. counterparts do, but in terms of an industry that is doing well in the stock market, European tech stocks are it.
According to a report in Reuters, tech stocks in Europe are gearing up to end the first quarter with the title of the best-performing sector. Investors are pouring into the industry that they think will play a central role as digital developments happen across a bunch of sectors. Reuters pointed out that tech stocks in Europe have gained close to 12 percent in the first quarter, doing better than the broader market, which saw a 4.8 percent increase. It’s also better than their performance during the first quarter of last year, when tech stocks in Europe declined 5.4 percent.
Reuters noted that driverless cars, iris scanning tech and augmented reality are only a few of the technology themes that should lift European tech players, including STMicroelectronics, Infineon Technologies and SAP. What’s more, a lot of software companies in Europe are big players in corporate back officers and could play a role in companies cutting costs via technology.
“Every consumer is exposed to Google, or Facebook, or Twitter … something like SAP, which actually is in most corporations, is less visible to the end consumer,” said Marcus Morris-Eyton, European equities portfolio manager at Allianz Global Investors, in the Reuters report. Reuters noted tech accounts for close to a quarter of Morris-Eyton’s portfolio, with SAP being his largest holding. Reuters noted that also helping the tech sector is the fact that isn’t doesn’t have as much exposure to short-term political and economic developments and is more reliant on global trends over the long term in technologies including automation, driverless cars and augmented reality.