Tech Turmoil? Why SVB Financial Isn't Worried About Market Volatility
SVB Financial Group (NASDAQ: SIVB), the parent company of Silicon Valley Bank, just put the final touches on an incredible 2021. However, the leading banker to the "innovation economy" has taken a hit along with other tech stocks in recent weeks, falling more than 20% from all-time highs. This comes not just despite a great fourth-quarter 2021 earnings report but also an upgrade to full-year 2022 guidance and the prospect of higher interest rates in the next year -- one of the primary ways banks earn income.
However, SVB management expressed confidence in the niche of clients it serves during the last earnings call. With 2022 looking like it will be a fantastic year for this investment bank, the recent market volatility tees up a fantastic buying opportunity for the stock.
SVB Financial provides services to what it calls the innovation economy: disruptive start-ups in technology and related fields as well as the founders, key employees, and venture capital investors of such start-ups. In addition to providing various banking, lending, and investment services, SVB often invests directly in these up-and-coming private innovators -- yielding SVB shareholders an indirect investment in many of the companies that eventually go public via the IPO process.
Source Fool.com
