While a few companies in the US technology space have been in the hot seat lately, Jonathan Curtis, vice president and research analyst with Franklin Equity Group, is largely unfazed. He said temporary “blips” affecting certain stocks are par for the course as consumers get used to new technologies—and how they impact our lives. He sees the overall long-term fundamental backdrop for the sector as sound.

We’ve seen a recent selloff in the US technology sector as some companies in the space have faced near-term challenges and negative press. But as long-term investors, we are not deterred. The tech sector overall has been performing well over the past year, so it certainly doesn’t surprise us to see the market give back a bit of those gains.

In the first quarter of this year, concerns about consumer data privacy and potentially tighter regulatory controls exacerbated existing investor nervousness tied to speculation the US Federal Reserve would quicken the pace of interest-rate hikes in response to higher wage growth. Investor sentiment was further rattled by the possibility of an escalating trade skirmish, primarily with China.

Data Privacy Concerns: The Elephant in the (Digital) Room

While safety issues have bubbled up in the autonomous vehicle space recently, online platforms have faced increasing scrutiny over data privacy. Facebook was caught in the crosshairs amid revelations that a data analytics firm improperly kept a small portion of Facebook’s user data for years, igniting a major debate over user and data privacy.

While we can’t predict what will ultimately happen with Facebook or any other individual company, we think tech companies in general will be able to regain consumer confidence and keep engagement high. We view the sector’s recent setback as likely a short-term blip and not a structural change in the trajectory of the industry or the business models of these companies.