Investors have been in for a fairly easy ride since the last financial crisis. Since collapsing by over 55% between October 2007 and March 2009, the S&P 500 has since risen by 182.95%. Yet some companies, such as Tesla Motors, Inc. (TSLA), Amazon.com, Inc. (AMZN), and Netflix, Inc. (NFLX), have seen their share prices rise far more rapidly still, leading some to wonder whether we may be in the midst of a new technology bubble. In this article, we consider arguments for and against this notion before examining how a tech bubble might affect the economy.
Note: Unless otherwise specified, references to “the economy” in my Investopedia articles relate to the economy of the United States. This is due to the fact that Investopedia is an American publication with, I presume, a predominantly American readership.