Nick Griffin, CIO Munro Partners, said the COVID-19 pandemic had accelerated trends that were already in play and had forced investors to think longer-term about valuations for companies that had enjoyed rapid growth.

He highlighted how payments platform PayPal had grown its active users between one million and two million a month, but was now growing active users at seven million a month.

Munro Partners Nick Griffin says tech stocks are “a game of very few winners and lots of losers.” Jessica Hromas

“You not going to get the earnings from those seven million new actives today but you’re embedding value into the future so their multiple is going up. ”

He also spotlighted online video conferencing platform Zoom, which has a market capitalisation of around $US70 billion ($98 billion) and “makes no money”.

The evolving nature of business triggered by the pandemic meant investors shouldn’t use one year of forecast earnings as a yardstick to value a business that could enjoy multiple years of growth and dominate an industry.

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