The question is top of mind amid the 2022 market rout. While similarities abound, one difference stands out: This phase of digital transformation is still in its early days, which means that some beaten-down tech names could have healthy prospects for long-term growth.

True, U.S. equities have been trading down hard for months, and tech is down very hard: From their recent peaks, companies in the NASDAQ have sold off at a rate comparable only to the Dot-Com Bubble (October 2000 to October 2002) and the Great Financial Crisis (November 2008 to April 2009). As Jason Goepfert of Sundial Capital Research tweeted about the NASDAQ on April 29, even before this week’s meltdown:

So if big tech stocks are entering what Bloomberg Opinion’s Parmy Olson recently dubbed an “age of uncertainty,” what cause for optimism is there? I rest my case on the framework that Stanley Druckenmiller, the former chairman and president of Duquesne Capital, laid out to me in an interview a year ago.

Druckenmiller was speaking to media outlets about the Federal Reserve’s very loose pandemic monetary policy. He called it “crazy” and said it was creating a bubble in every asset. Based on this, Druckenmiller said the biggest risk to the market was the Fed raising rates to rein it all in.

Druckenmiller has been right on all counts. The Fed has begun a tightening cycle and just raised rates by 50 basis points on Wednesday. Bloomberg Economics expects it to do the same in the next two meetings.

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