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  5. ADBE: I am not specifically asking about these 4 equities, rather they are representative of some tech stocks that have been increasing dramatically in the last few weeks / months. [Adobe Inc.]
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Q: I am not specifically asking about these 4 equities, rather they are representative of some tech stocks that have been increasing dramatically in the last few weeks / months. Are we looking at a bubble in tech? Where is all the momentum coming from? Many thanks.
Asked by Leonard on January 19, 2024
5i Research Answer:

Tech stocks are very highly sensitive to interest rates, so with the expectation that rates will fall they can see an uptick in valuation. But currently the sector is being driven by increased spending by customers. Data centres and AI and cloud are huge growth areas, and guidance and results from companies are showing that business is far better than expected right now. Valuations are improving reflecting improved overall confidence. Momentum of course is also a factor, as funds that do not have exposure get left behind and start buying. We would not call it a 'bubble' at this point because in many cases companies' earnings and outlook are increase faster than their stock prices. 

Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ADBE, QCOM.

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