Tech Sell-Off Healthy
With many technology names trading well above our fair value estimates, the recent pullback in the sector isn’t a huge surprise.
Brian Colello: We think Facebook has wide moat based on intangible assets around its data that it owns. It has enough data about users that it can allow advertisers to better target customers, get a better return on their investments, and in turn, Facebook's able to capture better pricing. That's what contributes to a lot of our high growth rates for Facebook over the next decade.
Now, if that data is at risk, and I think there's two ways why this data is at risk, certainly that would be a negative for the firm and that would lead to part of the sell-off.
Brian Colello does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.