Goldman Sachs The Markets
What tech investors are looking for now
Mar 15, 2024
Tech investors are looking beyond AI to explore small caps and non-profitable tech. They discuss the impact of inflation on tech assets and market trends like the equal weighted S&P 500 hitting new highs. The focus is on semiconductors and software, with increased investor interest influenced by market factors like interest rates. Mention of upcoming events such as a semiconductor conference and the Federal Reserve meeting reflecting changing market sentiments.
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Quick takeaways
- Tech stocks' performance impacted by inflation and company exposure to interest rates.
- Software sector gaining investor attention due to underperformance compared to semiconductors.
Deep dives
Effect of Inflation on Tech Sector
Inflation's impact on the tech sector varies depending on the company's exposure to interest rates and duration of assets. Last week, smaller or non-profitable tech areas underperformed as they were more sensitive to the cost of capital. Companies with substantial cash reserves were less affected, showcasing the importance of financial stability during uncertain economic conditions.
