Adyen Stock: A Bargain Buy or Overpriced?

May 17. 2023. 6 mins read

Here’s a fun fact: The U.S. tech industry has shed more than 350,000 jobs since the beginning of 2022. On the other hand, the economy as a whole added millions of new employees, with overall unemployment hovering near a record low of 3.4%. On the other other hand, tech stocks have significantly outperformed the broader S&P (up 24% versus 10% as of May 16) since the beginning of the year. This is despite the “challenging macroeconomic environment” that has been the refrain of every tech company’s earnings call in recent memory. 

Charting the tech worker layoffs since January 2022.
Lots of tech workers have been sent to the unemployment lines since last year. Credit: Layoffs.fyi

There are probably a few reasons behind this apparent incongruity between layoffs and stock performance. The simple version: Layoffs = companies taking steps to run lean now that capital has dried up, which investors reward by sending stock prices higher. The bizarro world of the Rona sent tech stock valuations through the roof, causing a hiring spree. The subsequent crash that sunk tech stocks (at least temporarily) and startup valuations forced some soul-searching around growth at all costs. 

The big takeaway: tech companies over-hired a lot of overpriced talent. Consider that the average tech worker makes at least six figures. Some back-of-the

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