Navigating the High Valuations of Technology Investments: Tips from Expert Analysts

Investing in technology can be an expensive venture at the moment, with some US tech giants experiencing incredibly high valuations. However, there are ways for wealth managers and investors to access this opportunity while keeping valuation in mind. According to Dan Smith, senior equity analyst at Canaccord Genuity Wealth Management, investing in technology is currently not cheap. Timing when to invest and when to exit, while maximizing returns, is a challenge for investors.

Storm Uru, who co-manages the Liontrust Global Technology fund, believes that the opportunity in technology is significant and just beginning. However, he is cautious about excessive valuations and sets target prices for the stocks he owns. If a stock exceeds the target price, he sells it unless the fundamental reason for owning the stock has improved. Smith focuses more on companies that facilitate artificial intelligence (AI) rather than pure AI companies due to more attractive valuations in that sector.

Uru also believes that companies benefiting from AI, rather than being AI companies themselves, are worth investing in. This approach has become increasingly interesting to him. Overall, both experts emphasize the importance of considering valuation when investing in technology while also being aware of the potential for exponential growth.

Investing in technology can be an exciting venture with significant potential rewards. However, it’s important for wealth managers and investors to keep valuation in mind and time their investments wisely. With careful consideration and research, investors can access this opportunity while minimizing risk and maximizing returns.

One way for investors to access this opportunity is by focusing on companies that facilitate AI rather than pure AI companies themselves. While these companies may have less attractive valuations compared to pure AI companies like Tesla or Nvidia, they still have tremendous potential growth opportunities.

Another approach is investing in companies benefiting from AI rather than being AI companies themselves. These companies are often overlooked but have significant growth potential as they leverage emerging technologies like machine learning and natural language processing.

Overall, both Storm Uru and Dan Smith emphasize the importance of considering valuation when investing in technology while also being aware of the potential for exponential growth.

In conclusion, investing in technology can be expensive at the moment with some US tech giants experiencing incredibly high valuations. However, there are ways for wealth managers and investors to access this opportunity while keeping valuation in mind through careful consideration of various investment strategies like focusing on companies that facilitate AI or benefit from AI technologies or setting target prices before buying stocks exceeding them.