The share prices of Appian (NASDAQ: APPN), Fastly (NYSE: FSLY), and Alteryx (NYSE: AYX) were all climbing today as some investors appear to be moving back into the tech sector. Investors have been particularly wary of technology stocks recently as inflation has climbed to a 40-year high, but the rally from these three stocks today shows that some investors may think the sector has finally reached its bottom.
Appian was up by 6.5%, Fastly had gained 6.2%, and Alteryx jumped by 9.8%, as of 12:32 p.m. ET.
There wasn’t any company-specific news today that was pushing up the prices of these stocks. Instead, investors may be taking a look at the broader market sell-off that’s occurred this year — the tech-heavy Nasdaq Composite is down 29% year to date — and thinking that it’s time to bet on high-growth tech stocks again.
Investors first fled the tech sector as inflation settled into record highs and as the Federal Reserve began aggressively hiking the federal funds rate in an attempt to bring inflation back under control.
High-growth stocks like Appian, Fastly, and Alteryx have been especially scorned because they’re viewed as riskier investments compared with highly profitable companies that can easily weather a potential economic storm.
But with Appian down 63%, Fastly falling 78%, and Alteryx losing 39% over the past 12 months, some investors are likely thinking that most of the damage has already been done to these growth stocks and are now snatching them up at a perceived discount.
The change of heart is coming just after the Federal Reserve increased the federal funds rate by 75 basis points this month, and it is likely planning for a similar rate hike in July. With the market already expecting significant interest rate increases, some investors may be thinking the worst of the stock sell-off has already occurred.
There’s no way to know, of course, if the technology sector has reached the bottom or not. There’s still plenty of uncertainty ahead as the Fed continues to make moves to curb inflation and as the economy reacts to rising rates.
Investors will get a clearer picture of how Appian, Fastly, and Alteryx are doing when they report their next quarterly financial results. Each is estimated to do so during the first week of August.
Until then, investors should continue to keep a close eye on any new economic developments. While the Fed is trying to curb inflation, it also says it wants to avoid a recession. Doing both won’t be easy, and investors should prepare for more share price swings ahead as the market tries to figure out what’s ahead for the economy.