Louis Krauskopf
NEW YORK (Reuters) – The U.S. technology sector continues to grow after impressive growth in 2023, buoyed by strong first-half earnings and widespread interest in improving productivity through artificial intelligence and other technologies, according to Société equity strategists. General is poised to continue to perform well.
Many of these stocks are off to a strong start to the year, with high-tech and technology-related sectors driving the S&P 500's 24% gain in 2023.
As a result, the market capitalization of the tech-heavy Nasdaq 100 has grown to half that of the S&P 500 and 30% of the global MSCI stock benchmark, SocGen strategists said in a note Thursday.
“We recognize that concentration risk for U.S. and global equity indices is at record levels,” SocGen strategists said in a note.
Still, strategists said they remain overweight in the U.S. tech sector. They expected the sector's profit growth to accelerate in the first half of 2024, while economic indicators are also on an upward trend, and recommended investing in the equal-weighted Nasdaq 100 index.
Interest in artificial intelligence (AI) has increased since the World Economic Forum in Davos, with assets under management of AI ETFs soaring to record highs and hedge funds' positions on the Nasdaq 100 rising.
The company cited the “Rise of Robots” index, which includes 150 global stocks, as a way to invest in “productivity themes.”
(Reporting by Louis Krauskopf; Editing by Chizu Nomiyama)