Street Signals Tech Wreck 2025: Bubbling Bursting or Buying Opportunity?
Mar 6, 2025
Cayla Seder, a senior strategist at State Street Global Markets, shares her insights on the tumultuous current state of the equity market, particularly within the tech sector. She discusses the fading optimism around US tech stocks, the impact of high interest rates, and potential overvaluation concerns. Cayla explores whether this is a moment for cautious investors to seize buying opportunities or a signal of a bubble about to pop. The conversation also touches on AI's growing energy requirements and its future implications for profitability in tech.
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Concentration Risk in Tech and U.S. Equities
- Tech and communication services were the most overweight sectors, indicating concentrated risk.
- Investors held a sole overweight in U.S. equities and underweight most other regions.
Tech Hardware and Semiconductor Overweights
- Within tech, overweights concentrated in tech hardware and semiconductors, with semis at the 86th percentile.
- While positions decreased slightly across these areas, they remained elevated, suggesting diversification, not exodus.
Shifting Flows Within Tech
- Recent flows show increased demand for U.S. tech hardware and reduced selling in semiconductors.
- Software is experiencing accelerating selling, suggesting a shift within the tech sector.