The first half of 2025 has ushered in a wave of unpredictability, as businesses in all sectors and industries have been grappling with ongoing uncertainty resulting from government policy and other macroeconomic factors. But, while not entirely immune to the impacts, the technology sector may be better positioned than many to withstand the storm.
“Events of the last few years have helped tech companies prepare for circumstances like these,” said Matthew Embacher, managing director of the Technology sector for PNC Corporate Banking. “Many tech businesses saw a large ramp-up in demand and revenue during the Covid era, only to experience fluctuation and uncertainty around growth trajectory in the months that followed. The result is that they started thinking about ways to remain resilient and flexible, and this stands to benefit them in the current environment.”
While it is unclear what may lie ahead in the near term, in Embacher’s view, all categories of technology are likely to be bigger in five to ten years than they are today, and companies that can find ways to navigate the uncertainty will be well positioned to achieve growth.
“The best offense is a good defense. It’s important to make sure you have flexibility and capacity built in, because you really don’t know where things are going to go from day to day,” said Embacher. “Make sure you are buttoned up if the worst-case scenario happens. But if the best-case scenario happens, you need to be ready to act. Staying nimble may be particularly important for smaller organizations, since they may not have the same capacity as companies of larger scale to absorb impacts from tariff policy and general swings in the market.”
Enterprise Software
While not completely insulated, the enterprise software sector may be particularly well situated to withstand macroeconomic volatility. Growth rates may come down to some degree during periods of uncertainty, but these companies are likely to continue to achieve growth over the longer term, primarily due to the nature of the service they provide. For many businesses, enterprise software is integral to ongoing initiatives that are mission critical to strategic business priorities, including digitization, cloud adoption, artificial intelligence (AI) adoption and cybersecurity. The essential importance of software to these business purposes, combined with customers with long-term contracts, provide a level of stability for enterprise software companies.
In the current environment, while customers may be cautious about taking on new projects, they are unlikely to cut software spending in the short term.
Semiconductors
The semiconductor industry shares a similar resilience, based largely on the adaptability it has developed over the last several years. In contrast to some traditional business models, many semiconductor companies were built with the ability to be flexible and nimble in handling changes to day-to-day operations and have endured some level of fluctuation in growth cycles throughout their trajectory. They also have an established track record of operating within government-imposed export restrictions, which helps them to be well adapted to sustain macroeconomic volatility.
Artificial Intelligence (AI)
While AI continues to be at the forefront of the discussion in the tech industry, it also remains at an inflection point. Many companies have yet to decide if the technology is effectively achieving the return on investment they are making in AI projects. For some, integrating a human-in-the-loop (HITL) approach, which incorporates both human involvement and machine learning to achieve desired outcomes, is emerging as a possible path forward. However, it remains a developing market, and even as significant dollar investment in AI continues, the roadmap is still developing in terms of the degree to which the technology will ultimately be leveraged and in which industries.
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