For several years, investors, from institutional to retail, couldn’t get enough of the tech stocks with all their promises of future growth. But now the market has spoken and it’s saying precisely this – valuations matter again.
Despite strong fundamentals for the chip king, Research Affiliates says investors are overplaying Nvidia as the ‘safe’ hand in the AI game.
Technology stocks at the big end of the S&P500 have enjoyed a (mostly) golden run, but Atrium Investment’s Brendan Paul warns that Nvidia’s astronomical valuation may have tipped the balance.
Investors and advisers have a tendency to extrapolate recent events into the future, and the last six months have shown how dangerous this can be. For those reviewing and building portfolios as the new financial year begins, five key issues should be front of mind.
The meteoric rise of Nvidia (NVDA) parallels generative AI’s own stratospheric journey. Dataset provider Appen provides an interesting local proxy stock, alongside a new wave of AI-themed ETFs.
There is a hidden bifurcation in the S&P 500 that retail investors may not be seeing, but it has private investment manager Neuberger Berman showing a degree of caution.
Despite increased volatility emanating from the banking sector, tech stocks have been supported by falling bond yields on fears the global economy could slip into recession this year, with big-name companies leading the gains.
While advisers are not yet seeing substantial client demand for semiconductor and chip stocks, the popularity of the AI chatbot ChatGPT has highlighted opportunities for Australian investors to gain exposure to the surging sector.
