The COVID-19 pandemic-led tech boom seems to be ending as the industry grapples now with supply chain issues. Furthermore, the industry faces the risk of greater regulation, which could rein in its performance. Against this backdrop, popular tech stocks PayPal (NASDAQ:PYPL), Activision Blizzard (NASDAQ:ATVI), Roku (NASDAQ:ROKU), and Robinhood (NASDAQ:HOOD) were recently downgraded by Wall Street analysts, and we think are best avoided now. Read on.The pandemic-led tech boom seems to be cooling down as more people return to offices as the percent of the population inoculated against COVID-9 increases, leading to fewer hours spent online. Furthermore, the tech industry is currently struggling with global supply chain issues, and many tech companies posted disappointing earnings reports for the third quarter.
The industry is also facing the risk of heightened regulatory measures. Congress is considering new legislation to monitor tech companies on issues ranging from privacy to age restrictions. Two antitrust bills have been proposed—one from Energy and Commerce Chair Frank Pallone and another from Senators Amy Klobuchar and Chuck Grassley—to guard against the spreading harmful information and to prevent tech companies from giving an advantage to their products over competitors’.
Given this backdrop, popular tech stocks PayPal Holdings, Inc. (PYPL), Activision Blizzard, Inc. (ATVI), Roku, Inc. (ROKU), and Robinhood Markets , Inc. (HOOD) were recently downgraded by analysts.