Explore the latest insights on the UK technology sector in this three-part Hardman Talks series. Technology analyst at Hardman & Co, Richard Jeans, meets with Larissa Adams to discuss the key findings from his latest report looking at recent market trends, investor sentiment and the key factors shaping both large cap and small cap UK tech companies today.
Watch each part to gain a clear understanding of the forces driving the UK tech sector.
Read Richard’s Tech sector outlook for more detail.
Despite a challenging year and notable underperformance versus the broader market, fundamentals remain resilient for UK tech. Trading updates have been broadly positive, balance sheets are strong and valuations are now hovering around pandemic-era lows. For investors, could this represent a compelling opportunity?
In Part One Richard explores the growing disconnect between market sentiment and company performance, with investor concerns around AI disruption weighing heavily on valuations across sectors including digital advertising, classifieds, analytics and enterprise software. He highlights a significant structural shift: shrinking equity supply. With substantial M&A activity since 2020 and a largely closed IPO market, the sector’s reduced supply could provide support for valuations over time.
Watch Part One
In Part Two Richard Jeans explores the impact of AI on the UK tech sector – and whether investor fears are justified. With US technology giants set to invest hundreds of billions into AI infrastructure, Richard examines whether AI could truly disrupt existing business models. While pricing models may evolve, established software companies still benefit from complex, secure and highly regulated systems that are not easily displaced.
He also connects these themes to market performance, highlighting how AI concerns, alongside macroeconomic pressures, have driven a significant correction in valuations, particularly among small cap software stocks.
Watch Part Two
In the final part Richard Jeans examines current valuations across the UK tech sector and what they could mean for investors. He discusses how both large cap and small cap companies are positioned today, alongside growth, profitability and balance sheet strength. The episode brings together the main themes from the report, offering a clear overview of the sector’s current landscape and the factors investors should be watching.
Despite ongoing concerns around AI disruption, balance sheets across the sector remain robust, and most companies are EBITDA positive. This is not a distressed sector – but rather one that appears to be priced conservatively.
Watch Part Three
