First, let’s examine the story.

Only the Young

On the 15 September, US fintech PayPal banished two right-leaning groups from its platform. These were UK organisations The Daily Sceptic, a news site, and The Free Speech Union, a campaign group.

Both were founded by a well-connected individual called Toby Young, the associate editor of The Spectator magazine. After being deplatformed, he kicked up such a furore that the issue was raised in Parliament, and 42 peers and MPs signed a letter urging the Business Secretary Jacob Rees-Mogg to act.

PayPal backpedalled on Tuesday, unblocking Young’s accounts. However, the experience has left the right-wing firebrand embittered.

In a column for The Spectator, Young vowed not to use PayPal again despite his accounts having been reinstated. He added that he had received “thousands of emails and messages” from supporters who had shut their own PayPal accounts “in solidarity”.

Upside surprise for Wise?

There is plenty of choice in the fintech world for those who don’t want to use PayPal. One option is Wise (LSE:WISE), which allows users to transact in over 50 different global currencies.

Indeed, when it comes to making international transfers, Wise offers a much better exchange rate than PayPal. While PayPal charges the mid-market exchange rate plus a 3.5%-4% markup, Wise offers the interbank exchange rate pure and simple.

Plausibly, some of the ‘thousands’ who quit PayPal in support of Young could turn into Wise users.

The company grew quarterly revenue by 51% year on year to £185.9m, according to its Q2 filing this year.

Wise projects its revenue growth will be between 30% and 35% in the next financial year. Perhaps growing discontent over PayPal’s treatment of right-leaning groups could help Wise hit or even surpass that target.

Sardines in a can

Although I use Wise’s services, and I have considered buying shares, I have never pulled the trigger. That is because the number of options in the fintech space has become bewildering.

In addition to PayPal and Wise, they include Amazon Pay, Apple Pay, Atlantic Money, DonorBox, Google Pay Send, Mercado Pago, Payoneer, Revolut, Skrill, Stripe, Square, and Western Union.

And that is not even an exhaustive list!

If I could buy shares in a well-balanced ETF with exposure to all of the many fintech providers, I would. After all, the sector is forecast to quintuple in size by 2030.

However, many of the emergent competitors – like Atlantic Money, DonorBox, Stripe, and Revolut – are not publicly traded.

A quick look at Young’s news site, The Daily Sceptic, shows me he is now accepting donations using DonorBox instead of PayPal. Meanwhile, on his Free Speech Union page, visitors are encouraged to become members via a payment through Stripe.

The barriers to entry in the fintech space are too low to make any particular company a good investment for me.

Wise (FY22 earnings)

Wise (LSE: WISE) is a fintech company that provides a money transfer service. It allows customers to send money abroad and get paid in other currencies. Wise is expected to unveil its FY22 earnings results for the year ending March 2022 on Tuesday 28 June.

Although there’s no previous record to compare with in terms of earnings per share (EPS), the earnings preview indicates that revenue is expected to grow by 32%. This is seen as generally positive as Wise continues to take market share from the likes of PayPal and Western Union. Having declined over 60% since its initial public offering, a better-than-expected number on its top and bottom lines could see the Wise share price recover from its bottom.

Moonpig (FY 22 earnings)

Moonpig (LSE: MOON) is an internet-based business. The company makes its money mainly from selling personalised greeting cards, flowers, and gifts. The FTSE 250 firm is expected to release its FY22 earnings results for the year ending April 2022 on Wednesday 29 June.

Moonpig is expecting to show a slight decline in revenue for the most recent year. This is due to the slowdown in sales after the pandemic. Nonetheless, the online business is still expecting its revenue to come in above pre-pandemic levels, with its bottom line also showing an improvement.

Mulberry (FY 22 earnings)

Mulberry (LSE: MUL) is a British fashion company. It is best known for its luxury leather goods, particularly women’s handbags. The small-cap company is expected to post its FY22 earnings results for the year ending April 2022 on Wednesday 29 June.

The earnings preview points towards a slight growth in revenue despite a slow down in retail sales lately. This is due to its status as a luxury brand. Due to a lack of liquidity in the stock, its share price has largely stayed unmoved this year. Consequently, there’s a lack of coverage on the stock. Nonetheless, higher revenue with a better EPS could have investors jumping for joy, sending the stock higher.

So what’s going on with this stock? And, more importantly, has the share price fall created a buying opportunity for me?

Why has Wise’s share price fallen?

In my view, much of the recent share price decline here is down to the FinTech company’s sky-high valuation. When I last covered Wise shares in December, the stock had a forward-looking price-to-earnings (P/E) ratio of about 120, which is very high.

Last year, when interest rates were near zero and central banks were pumping money into the financial system, that valuation may have seemed reasonable to many investors. However today, it’s a different story.

With interest rates rising rapidly (higher interest rates make expensive high-growth stocks less appealing), and central bank liquidity being withdrawn, valuation has become much more of a focus for investors. As a result, expensive technology stocks such as Wise have been dumped across the board.

Should I buy Wise shares now?

As for whether I’d buy Wise shares now, I’m not convinced the risk/reward proposition is attractive yet, even after the big price fall.

Don’t get me wrong, there are things I like about Wise. For a start, I think it offers a brilliant service. I tend to transfer a lot of money back and forth between the UK and Australia using its platform and the service is amazing. I can make a payment from Oz and it will arrive in my UK account within minutes. It’s worth noting that in the final quarter of calendar 2021, 45% of the company’s transfers were instant, which is impressive.

I also like the fact that the company is already profitable. That makes the stock less risky, to my mind.

However, an issue for me is that Wise is set to face plenty of competition from rivals such as PayPal, Remitly, Azimo, XE, OFX, and Currencies Direct in the years ahead. The problem here is that Wise is trying to win customers by lowering its prices. That’s not ideal in an inflationary environment. With costs rising everywhere, I want to invest in companies that can raise their prices.

Meanwhile, the valuation is still quite high, even after the recent share price fall. With analysts pencilling in earnings per share of 8.59p for the year ending 31 March 2023, the forward-looking P/E ratio is about 50. That’s not outrageous, given that earnings are projected to rise 38% this year (giving a price/earnings-to-growth (PEG) ratio of 1.34). However, it doesn’t leave much of a margin of safety.

So, for now, I’m going to leave Wise shares on my watchlist. In the current environment, where valuation is important, I think there are better stocks to buy.

With that in mind, let’s dive into the realm of tech stocks to discover what these businesses do and explore some of the UK sector leaders today.

What are tech stocks?

As the name suggests, tech stocks — or shares as they’re often referred to in the UK — can be any business providing a technological product or service. The most common form is a software solutions enterprise. However, this is only the tip of the iceberg.

Electronic device manufacturers, cloud infrastructure providers, content streaming groups and digital payment platforms are all prime examples of technology businesses. And that’s despite the fact that each operates in different industries with contrasting target audiences.

The barriers to entry for this sector aren’t exactly high. Anyone with a laptop, an idea and a strong determination can start coding with next to no budget. In fact, that’s precisely how some of the biggest tech stocks today got started.

As a result of this abundance of competition, these businesses are often rigorously investing in research and development (R&D) as well as marketing to the point that most stay unprofitable for many years. That makes them highly dependent on external financing typically raised through equity issues even after their initial public offering (IPO).

Needless to say, tech shares carry a higher risk profile than the average business. But if we travel across the pond and look at the S&P 500, the vast majority of its returns in the last decade have been driven by tech stocks like Apple, Microsoft, Amazon and Meta (Facebook). In other words, the elevated risk comes with an even more considerable reward potential.

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Top tech shares in the UK

Here are five leading UK tech shares in order of market capitalisation.

Ocado Group

Ocado Group is best known for being a key player in the online grocery space. The business runs a website that allows consumers to order groceries from the comfort of their own homes. And during the height of the pandemic, demand for such a service skyrocketed.

This e-commerce operation remains a core part of the business today. However, management is paying far more attention to the lesser-known side of the company – its robotics platform.

What has helped make Ocado’s online grocery store a success over the years is its ever-growing investments and research into robotic automation. Today, almost every aspect of its fulfilment centres are run by machines, drastically reducing labour costs and accelerating the process of packaging customer orders for delivery. 

The tech stock is now offering its warehouse automation platform to other retailers under the name Ocado Smart Platform (OSP) for some pretty substantial fees. But by providing significant cost savings, the firm has secured contracts with companies like Morrisons in the UK, Kroger in the US, and a handful of others.

Key Metrics:

• Market Cap: £8.94bn (as of 21 Mar 2022)
• Average Daily Volume: 2.05m
• HQ: Hatfield, UK
• Cash/Debt: £1,470m / £1,828m (as of 28 Nov 2022)

Avast

Avast is a tech stock that operates in the currently surging cybersecurity industry. The group offers a portfolio of anti-virus and security solutions suitable for personal computers as well as enterprise data centres.

It’s probably best known for its free personal anti-virus solution. The freemium technology protects personal computers from most threats. But its capabilities can be further extended through paid upgrades like its Cloud-Backup service, which prevents data loss in the event of a ransomware attack.

Management’s strategy of offering this free solution has filled up a massive pool of 435 million monetisable users, which it can directly target with marketing campaigns and promotions. And it’s an advantage that rival group NortonLifeLock is currently trying to get its hands on through an $8.6bn merger. But the deal is currently receiving antitrust regulatory pushback, which could halt it dead in its tracks.

Key Metrics:

• Market Cap: £5.89bn (as of 21 Mar 2022)
• Average Daily Volume: 4.42m
• HQ: London, UK
• Cash/Debt: £435m / £838m (as of 31 Dec 2022)

Wise

Wise is more commonly known by its former title TransferWise, and is a provider of digital financial solutions serving over 10 million customers worldwide. What started out as a simple money transfer business has evolved into a complete digital banking solution.

Using the tech stock’s platform, users can send and spend money abroad to 80 different countries, as well as receive and store payments in multiple currencies. Developers can integrate its payment technology into their own applications through APIs, and businesses can take advantage of its agile banking services.

Of course, all of these solutions can be achieved through traditional banks. However, the cost of doing so is significantly higher and is far less efficient. For example, a conventional international bank transfer can take three working days. Wise can do it almost instantly for a fraction of the cost, in most cases.

Key Metrics:

• Market Cap: £5.72bn (as of 21 Mar 2022)
• Average Daily Volume: 1.48m
• HQ: London, UK
• Cash/Debt: £5,392m / £98m (as of 31 Dec 2022)

Darktrace

Similar to Avast, Darktrace is a cybersecurity enterprise. However, it’s strictly business-facing and takes a different technological approach to fight cyber threats. Rather than taking the traditional route of hard-coding solutions, the tech stock’s software suite is powered by machine learning.

Whenever encountering a new threat, an AI programme analyses the attack to automatically derive a solution. Once the threat has been dealt with, the platform knows how to prevent such an attack again in the future, making its defensive capabilities grow stronger with each encounter. In other words, the software behaves similarly to a self-teaching immune system for computers.

The firm is still a relatively new entrant into the cybersecurity industry. But it’s already serving over 6,531 clients worldwide, protecting almost all aspects of their digital operations including cloud servers, email, internet of things (IoT) devices, and private networks.

Key Metrics:

• Market Cap: £3.13bn (as of 21 Mar 2022)
• Average Daily Volume: 3.43m
• HQ: Cambridge, UK
• Cash/Debt: £366m / £33m (as of 31 Dec 2022)

Kainos

As tech shares go, Kainos is pretty under the radar. The company is an expert in executing digital transformations within businesses and governmental agencies. This involves moving from traditional systems to modern-day cloud-based and AI-driven automation platforms.

The tech stock also provides a suite of consulting and software solutions to further improve talent management courtesy of its partnership with Workday. Clients can use these services to manage operations, payroll, recruitment, security, and even its financial accounts.

With companies and governments worldwide looking to reduce spending and improve operational efficiency, Kainos has had little trouble attracting customers. And despite its relatively small size, the group has secured contracts with the NHS, the Home Office, and even the Bank of Ireland.

Key Metrics:

• Market Cap: £1.75bn (as of 21 Mar 2022)
• Average Daily Volume: 231,710
• HQ: Belfast, UK
• Cash/Debt: £80m / £3.22m (as of 31 Dec 2022)

Are tech stocks right for you?

The UK tech sector isn’t as closely followed as its counterpart in the US. Yet that doesn’t mean there aren’t excellent opportunities for investors willing to take on additional risk.

Just looking at these five tech stocks, an investor who bought equal positions in each over the last half-decade is now enjoying a 196.8% return! That’s a 24.3% annualised return, smashing the FTSE 100 by a landslide.

But it’s not been a completely smooth ride. For example, investors who bought shares of Wise in its IPO last year are currently enduring a 44% loss.

Risk comes with the territory. And that means tech stocks aren’t suitable for all investors. But for those keen on reaping these potential returns, a diversified approach may be a sensible route. By buying shares consisting of promising UK tech companies, the odds of buying into a winner go up and should help irradicate the lacklustre returns of the losers.

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Fintech stock

Wise (LSE:WISE) is a London-based fintech firm. It offers international money transfer services. As somebody who uses such services frequently, I look for the quickest and cheapest options. Wise claims to have one of the quickest and cheapest options on the market. It has strategic agreements in place to be able process these transactions, helping it to garner over 10m users to date.

Wise shares are currently trading for 590p. The shares listed to the FTSE last summer at a starting price of 880p, which means shares are down 32%. The shares could fall further in the event of a stock market crash.

From a risk perspective, some consider the shares to be expensive at current levels. In fact, analysts at CitiGroup have rated the shares a ‘sell’ recently. They are concerned by the valuation and believe revenue would need to grow by 20% year on year for eight years to achieve the valuation. Furthermore, the strategic partnerships I mentioned earlier could cease, leaving Wise without its unique selling point of faster, quick services to its customers.

If there a market crash does occur in 2022, I believe Wise could be an excellent growth option for my holdings for a few reasons. Firstly, the global market for payment services is growing rapidly. Next, Wise has a decent track record of performance to date, although I do understand past performance is not a guarantee of the future. Third, Wise’s customer-centric business model is set up for it to grow its customer base and continue to stay quick and cheap. It is continually reducing fees for each transaction its customers complete, even as the business grows. This should inspire customer loyalty and with growing customer numbers, the signs are it will. 

If there were a crash, Wise shares would drop substantially, which could affect the current high valuation concerns. In terms of progress, Wise’s business model, partnerships, and track record indicate it could grow exponentially over the long term. In turn, this could offer me a lucrative return as a potential investor.

Stock market crash 2022?

Macroeconomic factors at play right now have led many to believe a crash could occur. Soaring inflation is a concern for many in the world economy. The rise of consumer prices is affecting some of the premier economies in the world, such as the US and China. It is worth noting that soaring inflation has triggered stock market crashes in the past. Speaking of China, recent growth there has slowed and it is in the midst of a real estate crisis. When the Chinese economy struggles, many economists are worried for the rest of the world’s economy too. It is worth noting that nobody could truly predict a stock market crash. All of the above points mentioned could cause a crash but are nothing but speculation and conjecture right now.

• Darktrace isn’t currently profitable.
• Wise is moving in the right direction.
• Idox Group could have some serious growth potential.

The Darktrace (LSE: DARK) share price has fallen 55% from its peak of 985p in September 2021. Investors clearly grew overexcited after its blockbuster IPO in April. While the company’s revenue and earnings outlook are improving, I think they still don’t yet justify the share price. I like to invest in tech stocks because of their scalability and critical role in the modern economy. But I think there are a couple of other options that would be better for my portfolio.

Cybersecurity

I still think that Darktrace has the chance to do well in the future. The company is in excellent financial health, has no debt and all its assets easily cover its few liabilities. Its AI driven, machine learning approach to cybersecurity could be nothing short of revolutionary, and its subscription business model could lead to a massive user base over the coming years. The problem simply is that Darktrace isn’t profitable yet and hasn’t been for some time. Revenues have increased by $80m in 2021, but earnings fell to -$149m.

Online payments

Wise (LSE: WISE) is an online payment and cash transfer company based in the UK. It too went public in early 2021 and it too saw its share price soar to 1,140p before slowly crashing back down to 649p at time of writing. A big difference between Wise and Darktrace however, is that Wise is profitable. Its margins are small, but 2021 has been a period of incredible growth for the company. Customers increased by more than 50% from 6m to 10m. Revenue jumped too from £302m to £421m. Again, only £39m of that was profit, but Wise has also been expanding into new territories and developing new products that could pay serious dividends in the future. These small profit margins could cause problems if the company runs into some unexpected issues, but for now all of the numbers are moving in the right direction. I’d be excited to add it to my portfolio.

Public sector software

Idox group (LSE: IDOX) is a software development company I’ve talked about a few times now. Currently trading for a mere 67.75p, it suffers even more acutely than Wise from small profit margins. It is profitable, but had a spotty couple of years in 2018 and 2019.

Earnings reports for the whole of 2021 have not been published yet, but for the financial year ending 31 October 2021, Idox reported revenue increased by 8% to £62.0m, and recurring revenue grew a further 2%.

If it can continue this growth over the coming years, I think we could see the share price rise significantly. It’s a bit of a gamble, but I’d happily add it to my portfolio.

What I’ve taken away from this research is that just because something is in the headlines doesn’t mean it’s a good investment. In fact, it could even mean the opposite. I’ll definitely keep my eye on Darktrace over the coming years, but for now there just seem to be other, better options for my portfolio.

A light at the end of the tunnel

If reports that Omicron really does cause milder symptoms are true, then I think we could actually be seeing the light at the end of the tunnel. And if that is the case, then the first thing I’ll be doing is booking a holiday.

I’ve already outlined my hesitancy about investing in airlines in 2021. I thought that many investors were overly optimistic about a return to normal and have been burned by lockdown after lockdown. But now the easyJet (LSE: EZJ) share price is 621p, 32% lower than this summer’s high of 921p. Its price-to-earnings ratio (P/E) sits at 12.8, only a little higher than the last 13 years median of 12.69. If the pandemic continues to wind down in severity, then I think we could see a much larger boom in value as we approach the summer.

But there’s no sugar-coating the fact that easyJet has suffered a lot over the pandemic. It will need to find inventive ways to maximise revenue in the coming years. But, against the odds, it survived and has managed to minimise losses at every turn. Cash burn was inevitable, but easyJet was able to keep it to £36m per week, a full £4m below the expected £40m. This resilience in the face of disaster has really impressed me and I can’t wait to see what the company does in better times.

A cheap but valuable digital service

Wise (LSE: WISE) makes it simple and inexpensive to move money across currencies and bank accounts. This UK IT firm went public in early 2021 and its stock price soared to 1,150p in September before plummeting to 678p at the time of writing. This is pretty normal for a company following an IPO since it takes time for the market to identify a share’s actual worth. Right now, the stock’s P/E ratio sits at a very low 5.16, meaning the price of the shares are closely aligned with the company’s earnings.

If I had any doubts about the health of the company, I need only look at customer and revenue growth over 2021. Revenue nearly quadrupled while Wise provided services to 10 million customers, up four million from 2020.

One thing I’m concerned about though is the company’s small profit margins. Earnings have fallen as the company has looked to expand into new markets. The smaller margins of course put Wise on shakier ground. If there’s a big black swan event in the global economy it could send it off balance. But, having said that, the pandemic was the ultimate black swan event and Wise has not only survived, but thrived. As life returns to normal, I think Wise, like easyJet, has the potential to benefit massively from pent-up travel demand.

Truly undervalued shares are hard to find, but I think these companies have both shown extraordinary resilience in the face of disaster. Now that their shares have fallen in price, I believe they will make excellent additions to my long-term portfolio.

According to the investment bank, shares in the money transfer business are priced for “excessive long-term growth expectations“.

Their analysis shows that the company would have to achieve a revenue growth rate of 20% per annum for the next eight years to justify its current valuation. As such, the reports suggest that the stock could underperform the rest of the market if it fails to meet these lofty expectations. 

Put simply, it seems as if Citi’s analysts believe the stock is expensive. I am not so sure. Yes, Wise shares might look a bit pricey, but I think it would be a mistake to suggest that the business cannot grow rapidly over the next few years. 

Growth potential

As I have mentioned in the past, Wise has tremendous growth potential. Currently, the company only accounts for a fraction of the global foreign exchange market, and customer numbers are growing every day. 

What’s more, unlike other businesses in the space, the group rewards its customers with lower prices. It continually reduces the amount of money it takes off the top of each transaction as the business grows. This provides better value for consumers and encourages customer loyalty in a highly competitive and commoditised market. 

That being said, Wise shares do appear expensive. Even after recent declines, the stock is trading at a forward price-to-earnings (P/E) multiple of 99.5. The ratio will fall to 76 by 2023, with further earnings growth on the cards. 

This valuation does not leave much room for error. It suggests that the market is expecting a lot from the company. If it fails to meet these lofty group expectations, investors could quickly turn their backs on the enterprise. 

The biggest risk facing it is the threat of competition, I feel. Companies like Western Union and PayPal are larger and far more established. This gives them much more financial firepower to compete with smaller outfits like Wise. 

Still, Wise does have a competitive edge. It is cheaper and more customer-focused. These qualities should help the business fend off threats from larger competitors. They may also help the company outperform the rest of the payments market, supporting its current valuation. 

The outlook for Wise shares

Overall, I think it is worth considering Citi’s opinion of the money transfer business. The stock does look expensive, and the market seems to be expecting a lot from the corporation over the next couple of years. 

Nevertheless, I believe the company has tremendous growth potential, and its unique business model should continue to attract consumers. As such, I am still happy to buy the shares for my portfolio as a long-term growth investment. 

The company’s market share is less than 1% of the £5trn a day global foreign exchange market. This means it has barely scratched the surface of this vast global marketplace. 

And I believe the enterprise will start to make a name for itself next year, as it reaches its first anniversary as a public company. 

The outlook for Wise shares in 2022

According to the company’s report for the six months to the end of September, the group served 3.9m customers in the third quarter, an increase of 23% year-on-year. Its overall payment volume also increased 44% year-on-year, which showcases Wise’s appeal to consumers.

Unlike many other technology companies, Wise actually reduced the price its customers paid in the third quarter. The cost of each transaction declined from 0.69% to 0.62%. 

By comparison, other companies charge as much as 3% of each transaction to convert currencies. This is the main reason why I think Wise shares will continue to head higher in 2022. The business is providing a service that clearly appeals to customers at a low price. Compared to competitors, the firm’s prices stand out. 

Management is planning to continue to reduce costs to consumers for as long as the company can sustain this strategy. As the group is already free cash flow positive, it looks like it can still push costs lower. 

For the six months to the end of September, Wise’s free cash flow totalled £59m, increasing 39% year-on-year. As this grows, it looks as if the business can continue to increase its marketing spend and reduce the cost of money transfers with consumers. The combination of lower costs and a wider marketing push should entice more consumers to the platform. 

Challenges ahead

Despite the company’s improving outlook, Wise shares will undoubtedly face some challenges as we move into the new year. These could include competition from larger peers that can afford to undercut the business on each transaction. 

If the group’s larger competitors decide to take meaningful action against the enterprise, it could struggle to fight off this competition. Profits will come under pressure as a result. These challenges could hit the company’s share price and force it to direct spending away from growth to maintaining market share. 

Despite these risks and challenges, I think the group could make an attractive addition to my portfolio in 2022. I believe Wise is reaching an important stage in its growth story. And I want to be part of the company’s expansion over the next few years.

As it continues to expand, I think the firm can become a force to be reckoned with in the international foreign exchange market within the next five years.

But I think we have some excellent tech companies right here in the UK.

Frictionless transfers

Wise (LSE: WISE) is a company that facilitates money transfers and currency exchanges in near real time. This tech company just went public earlier this year and exploded in value, reaching a high of 1,140p in September. But the share price has, in recent months, been seeing a consistent downtrend and has fallen to 762p. This is to be expected as the market tries to determine the true value of the company.

Wise has increased revenue year on year, but has so far kept profit margins small as it continues to expand its operations. I do think that reduced travel over the next few months could push the share price down further. But revenue actually increased over the pandemic months, which tells me there is demand for this service regardless of how many people go on holiday. I’ll definitely be adding it to my portfolio.

Public sector systems

Idox Group (LSE: IDOX) builds software and data collection programmes for clients across the UK. Its largest customer base is the public sector as councils and government agencies use systems Idox designs to help with collecting and organizing important data. Just this week the Scottish Council of Comhairle nan Eilean Siar began using an Idox software programme to help organize its building and planning permissions data.

Idox currently operates with a very small profit margin and if anything goes wrong this could upset the company’s outlook.

But, once a computer system becomes entrenched in a company or institution and all of its employees learn to rely upon it, then it often becomes very difficult to remove. If this happens then I think the sky’s the limit for Idox.

Idox currently trades for a very low 69p and I’ll be adding it to my portfolio shortly.

Cyber security tech

Darktrace (LSE: DARK) has been in the headlines a lot this year. Like Wise, it exploded into value and rushed all the way up to the FTSE 100 in just a few months. But also like Wise it has seen a big fall in value as insiders sell off their shares and it has failed to grow fast enough to justify the high price.

Despite this, Darktrace has been growing. Revenues are up and expected to continue this way over the next few years. I definitely think that the share’s all-time high of 945p was unrealistic, but the current price of 397p is more reasonable. There could still be further downward inertia as shareholders lose their nerve, but the business remains strong, offering a high-quality product on a subscription model. I’ll be adding it to my portfolio but don’t expect to see it pay off for several years.