Investors' interest in technology stocks

Investors flocked to U.S. technology stocks at their fastest pace in 16 years after a sharp decline triggered by U.S. President Donald Trump’s tariff announcement in April. According to a Bank of America survey, fund manager allocations to the technology sector between April and July saw the largest increase since March 2009. The Nasdaq Composite Index has broken consecutive records, rising more than 33% since its April lows. This rally was led by the “Magnificent Seven,” including Microsoft, Meta, Alphabet, Amazon, Apple, Tesla, and Nvidia, which recently reached a $4 trillion market capitalization. “Big tech is back in the saddle,” said Venu Krishna of Barclays, noting that investors are betting on technology stocks with strong earnings, high margins, and robust cash flow. Expectations are high ahead of the big tech companies’ second-quarter earnings releases. Despite the increased interest, some concerns remain. Technology remains one of the most expensive sectors, and fund managers are generally cautious about US assets. The tech sector, which was underweight by 1% last month, has moved to overweight by 14% this month. Meanwhile, the US dollar, which has lost 10% of its value this year, reflects broader concerns about US trade and fiscal policies. Nevertheless, sectors related to artificial intelligence continue to generate optimism for investors.