Tech had a rough summer. Where these investors see opportunities ahead
The QQQ ETF is flat since Memorial Day, while the VanEck Semiconductor ETF (SMH) and the Roundhill Magnificent Seven ETF (MAGS) are down slightly in that time.
TL;DR
- Major tech ETFs like QQQ and SMH have underperformed the S&P 500 since Memorial Day.
- Investors see potential for a 'catch up trade' in tech, focusing on infrastructure, cybersecurity, and software.
- Software, memory, and cybersecurity ETFs have seen significant gains over the summer.
- Small-cap stocks are outperforming large caps due to strong earnings growth.
- Commodities like gold, silver, copper, and basic materials are seen as diversifiers and essential for AI buildouts.
- Natural gas stocks are bullish due to increasing demand for electricity for data centers.
- Ultra-high net worth investors remain focused on US equities, with some having significant allocations to single tech stocks.
- Defense stocks are favored due to geopolitical tensions.
- Cryptocurrency is seen as a way to play agentic AI growth.