EdTech Stocks in Spotlight After President Trump’s Speech at Davo…

Donald Trump & Tech CEOs Talk Education

Education technology (EdTech) stocks are in the spotlight after President Donald Trump gave a speech at the World Economic Forum in Davos, Switzerland on January 21.

On top of that, Trump had plans to meet privately with Apple Inc. (NASDAQ:AAPL) CEO Tim Cook and IBM (NYSE:IBM) CEO Ginni Rometty. (Source: “Apple CEO Cook Plans to Attend Trump Breakfast in Davos,” Bloomberg, January 21, 2020.)

The two CEOs were to discuss a new campaign to highlight different ways that people can get an education.

The annual four-day, invitation-only forum brings together the world’s biggest business leaders, politicians, and investors from around the world. High-profile people give speeches, sit on panels, network, and ink deals.

The 2020 conference kicked off with a keynote speech by President Trump. (Source: “Donald Trump delivers key note speech at Davos 2020,” YouTube, January 21, 2020.)

One of the topics that Trump highlighted was his administration’s positive impact on the U.S. education system.

In December 2019, Trump signed a bipartisan bill that permanently provides more than $250.0 million annually to the country’s historically black colleges and universities (HBCU). (Source: “Trump signs bill restoring funding for black colleges,” The Associated Press, December 19, 2019.)

The bill restored the funding that lapsed on September 30 due to congressional gridlock. The legislation also benefits many other educational institutions that serve a large number of minority students.

In 2019, the Trump administration also made available over $100.0 million in funding for scholarships, research, and “centers of excellence” to HBCUs. (Source: “President Donald J. Trump Is Delivering On His Promise to Empower and Lift Up Our Nation’s Forgotten Communities,” WhiteHouse.gov, September 10, 2019.)

Innovative EdTech Trends

EdTech stocks go in cycles just like every other tech sector, but education never goes out of favor. In the U.S., the need for skilled workers has never been greater.

For-profit, education companies, however, took a hit under President Barack Obama after his administration took steps toward making tuition free at community colleges across the country. (Source: “America’s College Promise: A Progress Report on Free Community College,” Executive Office of the President, last accessed January 23, 2020.)

Over the last few years though, EdTech stocks have been gaining steam. This might have to do with the disruptive technologies fueling the growth of the EdTech industry.

These technological developments include artificial intelligence (AI), the Internet of Things (IoT), 5G, digital textbooks, online tutoring, and access to more data.

Together, they have been helping make education more accessible and providing a more personalized and immersive experience.

Analyst Take

Factors like Trump’s speech at Davos, the need for a better-educated workforce, and the overall success of for-profit educational institutions in the the United States have been helping juice EdTech stocks over the last number of years.

Many of these stocks have been benefiting from industry innovations, bipartisan political support, and media attention. Savvy investors might want to do further research into the EdTech sector.