Investing in Technology: Balancing Valuation and Opportunity in the High-Valued Sector

Investing in technology can be an expensive endeavor at present, with many companies in the sector commanding high valuations. Despite the challenges of investing in technology with current high valuations, wealth managers and investors are exploring ways to seize opportunities while keeping valuation in mind.

Dan Smith, a senior equity analyst at Canaccord Genuity Wealth Management, acknowledges the difficulties of investing in technology with current high valuations. However, he emphasizes that timing plays a crucial role in determining when to enter or exit the market to maximize returns.

Storm Uru, co-manager of the Liontrust Global Technology fund, shares this sentiment and believes that there are significant opportunities available to investors in the technology sector. He is cautious about excessive valuations and maintains a target price for the stocks he owns. If a stock exceeds the target price, he would consider selling it. Uru also suggests that focusing on companies that benefit from artificial intelligence (AI) rather than AI companies themselves can offer more attractive valuations.

Smith agrees with Uru’s assessment and prefers to look at companies that facilitate AI rather than AI companies directly. By doing so, he sees more attractive valuations in this area. Uru concurs and finds companies that benefit from AI to be an increasingly interesting area for investment. By focusing on these companies, investors can access the benefits of technological advancements while also considering valuation factors.

In conclusion, investing in technology can be expensive at present, but wealth managers and investors are finding ways to seize opportunities while keeping valuation in mind. Focusing on companies that harness AI capabilities offers an attractive way to invest in this exciting sector while also considering financial considerations.