Market Overview

Silicon Valley Is Toast, According To This Analyst

Silicon Valley Is Toast, According To This Analyst

The Silicon Valley growth story may soon be coming to an abrupt end. According to Global Equities Research analyst Trip Chowdhry, the recent economic slump in San Jose and Oakland is a sign that the Silicon Valley bubble is bursting.

What's Going On In Silicon?

The Bay Area lost 4,400 jobs in February and has now lost 8,600 jobs so far in 2017. Chowdhry blames the Silicon Valley “junk IPO parade,” a list of companies he believes have no viable long-term business prospects.

“[The] startup bubble continues to burst — zero durability, zero technology,” Chowdhry said. “It is all about one investor finding the next fool, and sadly they have exhausted all the fools.”

He believes the 8,600 jobs lost in the first two months of the year is just the tip of the iceberg. Chowdhry said trends such as the app economy, social media, mobility and hybrid cloud will not work for investors in 2017. In addition, he says Apple Inc. (NASDAQ: AAPL) stock is “toast."

Back in February, Chowdhry wrote that the tech industry is getting primed for a “significant reset,” one that could mean major pain for investors.

A List Of 'Junk' Names

Chowdhry highlighted the following companies as “junk” stocks that will be exposed in coming years:

  • Apptio Inc (NASDAQ: APTI).
  • Fitbit Inc (NYSE: FIT).
  • GoPro Inc (NASDAQ: GPRO).
  • Groupon Inc (NASDAQ: GRPN).
  • Mulesoft Inc (NYSE: MULE).
  • Nutanix Inc (NASDAQ: NTNX).
  • Pure Storage Inc (NYSE: PSTG).
  • Snap Inc (NYSE: SNAP).
  • Twilio Inc (NYSE: TWLO).

Chowdhry added potential future IPOs Cloudera, Pinterest, Uber and Lyft to the “junk” list as well.

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