Was tech’s ‘bull run’ simply a temporary surge?

The bull case for software growth in 2024

2024 could shape up to be a rebound year for software growth rates, helping both the largest tech companies and startups alike.

Rewinding the clock a few weeks, after ceding critical gains, software stocks found themselves in a funk. Then, new inflation data landed this week and ebullience returned. Key cloud and SaaS indexes quickly added value, while the broader yet tech-heavy Nasdaq Composite opened at 13,745.96 on Monday. It closed at 14,094.38 Tuesday, and is adding to that tally today.

Investors were cheered because falling inflation makes it less likely that the American central bank will raise rates further. Even without rate cuts, an end to rate hikes implies that some structural pressure on the value of tech stocks is concluding. Throw in hopes for a rate cut, and growth-oriented assets like tech shares could become all the more attractive.

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But what about tech company performance itself? Can tech companies meet rising investor confidence in their value with future results that will defend or extend those gains?

The answer is increasingly looking like yes. That’s critically good news for startups; upstart tech companies that have faced a market in recent quarters that was looking to curtail costs instead of investing in new software; and investors more hesitant to cut new checks while prices were in flux. A growth tailwind instead of the headwinds that 2022 and 2023 have brought to startup-land would feel like a climactic reversal. A winsome breath of fresh air.

What is the bull case for software growth in 2024? Several additive components, some of which are derived from public-company reports, some from startup datasets, and venture expectations regarding AI. All told, there’s enough good vibes to indicate that tech growth is going to have a better next year. Let’s talk about it.

Sunny data

An early indication that the market for selling software was shifting came via Amplitude’s earnings. This statement in particular caught our attention:

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