Liz Fisher, journalist

Tech stock investments have never been for the faint-hearted. The bursting of the dotcom bubble in 2000 marked the end for thousands of tech startups, but was in turn succeeded by the triumph of tech, culminating in early 2022 when tech stocks were the pride of many an investor’s portfolio. Since then, though, the value rollercoaster has thundered downwards, leaving many tech companies feeling the stock exchange pain.


By the first quarter of 2022, given a further push by the pandemic’s remote-working boom, the five biggest tech companies at that time – Apple, Microsoft, Amazon, Meta (Facebook) and Alphabet (Google) – were kings of the stock exchange heap, accounting for 22% of the entire market capitalisation of the S&P 500. Amazon and Alphabet, both unprofitable enterprises in 2000, were the two biggest companies on the US market, with a combined value of US$5.2trn and profits of over US$100bn in 2021.

Yet the performance of this Big Five, along with other tech stocks worldwide, crumbled from mid-2022. Over the course of 2022, the value of the Big Five fell by anything from 25% for Apple to 64% for Meta. Meanwhile the value of Zoom, which had hit a peak during the first year of the pandemic, tumbled by 46% over the same period. Since the start of 2023, the value of all five companies has picked up again but all are well down on their January 2022 highs.

Even so, the tech companies that are able to survive such volatility can be hugely profitable. The biggest IPO of 2012 in the US – and still the largest tech stock launch ever – was Facebook (now Meta), which floated on Nasdaq at US$38 a share, valuing the company at a whopping US$104bn. Over first few post-flotation weeks its market capitalisation dropped by about 50%, setting the scene for its rollercoaster stock market journey since then. If you are lucky enough to spot a winner and hold on until the bad times are gone, a fortune can be made.

Winners and losers

The barriers to entry in the tech sector are low. Some of what are now the biggest companies in the world started life in a student dorm or a suburban garage. But the speed of innovation and level of competition means the failure rate of tech startups is high and the past decade has been littered with high-profile casualties.

In the cloud

So where will the next Apple or Amazon come from? The first wave of successful tech stocks tended to be in the retail or comms sectors. The next significant wave focused on software as a service (SaaS). The HR software company Workday, for example, went public in the US in 2012 and its price-to-sales ratio peaked the following year. Its current share price (March 2023), although less than two-thirds the all-time high in 2021, is still well over three times its launch price in 2012.

Big Four on the tech trail

Accountancy firms are steadily reinventing themselves through technology, using it to add value to their services and automate routine tasks. This strategy has driven a wave of acquisitions of tech companies in recent years.

Cloud technology is an important area of focus for the big accountancy firms, as is artificial intelligence, machine learning, data analytics, and robotics such as drone technology. All these technologies are already being used by Big Four auditors.

The Big Four have focused on partnering with innovators to develop new products and cloud-based solutions. KMPG, for example, has a partnership with Microsoft, and recently announced a ‘major alliance expansion’ with Google Cloud. Other firms have made a number of strategic acquisitions in recent years:

PwC acquisitions
  • ACTS (US) – cloud
  • Netrovert (US) – cloud
  • Pollen8 (UK) – innovation
  • Sagence (US) – data
  • Venerate Solutions (India) – cloud
  • WebSecure Technologies (Australia) – privileged access management
  • Zero&One (Middle East) – cloud
EY acquisitions
  • Bridge Business Consulting (Australia) – big data analytics
  • Digital Detox (UK) – digital engineering
  • Fabernovel (France) – digital transformation
  • FreshWorks Studio (Canada) – digital design
  • Pythagoras (UK) – Microsoft
  • Seaton Partners (UK) – Microsoft Dynamics 365
Deloitte acquisitions
  • AE Cloud Consultants (Canada) – Oracle
  • Aptys (Belgium) – ERP
  • Bias (US) – cloud
  • Etain (Northern Ireland) – AI and data
  • Intellify (Australia) – AWS
  • Nubik (Canada) – cloud
  • SFL Scientific (US) – AI and data science
  • Striven (Canada) – tech testing and quality engineering