Published - May 19th, 2023 @ 11:43 AM (GMT+2)
While the American tech giants continue their ascending trend, with their stock value enjoying significant hikes since the beginning of 2023, investors may need to catch up on other sectors ripe with potential. Tech behemoths Apple (NASDAQ: AAPL), Google's (NASDAQ: GOOGL) parent company Alphabet, Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Meta (NASDAQ: META), Facebook's parent, have all registered a year-to-date rise exceeding 30%, with Meta posting an astounding increase of 101%.
Tech giants Apple, Alphabet, Amazon, Microsoft, and Meta have witnessed significant growth, starkly contrasting the broader market performance.
However, these tech titans' stellar performance starkly contrasts with the larger market, exemplified by the Dow Jones Industrial Average's modest growth of less than 1% this year.
Post-earnings season, 75% of tech firms have surpassed expectations, widening the gap between tech and other sectors.
Post-earnings season, the chasm between Big Tech and the rest of the market is further emphasized, with tech companies accounting for 75% of earnings that exceeded expectations. Meanwhile, other sectors exhibit mixed results against generally disappointing economic data.
With central banks hinting at easing the tight monetary policies of recent years, investors are speculating on another potential tech surge. The era of low-interest rates saw Big Tech outperforming, and the pandemic gave them another significant thrust.
Lait urges investors to explore opportunities in 'old economy' sectors to uncover deep value.
However, portfolio manager Freddie Lait warns that such a market orientation, though justifiable under current circumstances, could be dangerously myopic. The Latitude Investment Management's managing partner argued that the upcoming bull market phase would likely encompass diverse sectors, offering greater value.
Despite solid earnings by tech companies, Lait advocates for a balanced portfolio with diverse sector exposure.
Despite Big Tech's compelling earnings trajectory in Q1, Lait advises maintaining a balanced portfolio. He advocates for exploring opportunities across various market sectors while keeping a watchful eye on the growing valuation disparity between tech and non-tech sectors. According to Lait, it's time for investors to scrutinize the so-called old economy stocks, like the industrials listed in Dow Jones, to unearth value in non-tech sectors.
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