Goldman Sachs The Markets The case for a tech comeback
Aug 16, 2024
Peter Callahan, a sector specialist in Technology, Media, and Telecommunications at Goldman Sachs, teams up with equities sales trader Mike Washington to dive into the tech sector's ups and downs. They discuss the potential for megacap tech stocks to regain their leadership amidst shifting investor sentiment towards generative AI. Key catalysts, including upcoming earnings and Federal Reserve rate cuts, are analyzed, along with insights from the Jackson Hole symposium that could reshape market trends.
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Tech Stock Volatility
- Tech stocks experienced declines due to a mix of factors, including profit-taking, mixed earnings, and a debate around AI's cost versus revenue.
- Despite recent declines, many tech stocks are still up significantly year-to-date, indicating a fluctuating sentiment.
AI Sentiment Ebb and Flow
- Investor sentiment toward AI oscillates between excitement about its potential and concern over high costs and slow monetization.
- The cost of AI remains high, and widespread adoption and monetization are still some time away, leaving investors questioning valuations.
Shifting Market Leadership
- Tech's dominance in market leadership may be shifting as market breadth starts to improve.
- While tech's scale ensures its continued importance, broadening market breadth, with more companies outperforming the index, signals potential change.