Each month, “Ammirati on Innovation” episodes will look at ways that the disruptive-startup mentality is spreading beyond young entrepreneurs to big established corporations. Serial entrepreneur, venture capitalist and Carnegie Mellon B-school professor Sean Ammirati, who sits at the intersection of these high-change dynamics, provides insight. Today, Sean and I talk about the ongoing growth in value for tech companies and whether there’s a stock price bubble preparing to burst.
The Big Themes:
- The shift to digital continues: However, forever growth is not inevitable for every company. Peloton is a good example of a product that was perhaps overhyped during the pandemic, and we’re seeing corrections now in terms of its financial performance.
- The metaverse and its use cases: Outside of gaming, we don’t yet see a ton of excellent use cases for the metaverse, but more are emerging.
- An inflated market: Companies like Microsoft and others are doing great, have been for a while, and will continue to do great in the near future. But we are probably overdoing it in terms of the multiples we assume we’ll see on their stock prices.
The Big Quote: “If you said, will Microsoft revenue be up 5x In the next five years or down 5x in the next five years, I definitely would want to take the up on that bet. If you said, is the stock price going to be up 5x In the next five years? That’s a harder bet to make.”
This episode is brought to you by BMC Software.