Time to get bullish on Tech Stocks Post

As evident by the almost everyday headlines of new rounds of layoffs, we were in a tech recession for the last few months. I think that is over. I believe we have hit the bottom, and we will be seeing another boom of Tech stocks in the next few months.

“When the facts change, I change my mind – what do you do, sir?” – John Maynard Keynes

There are three reasons for my about-face.

1. The Fed is done with the rate hike.

2. The AI trend is real.

3. The Year of Efficiency

I believe the Fed is going to stop the rate hike. The regional banking crisis might have given the Feds a taste of what further hikes will do to the economy as the three big banks failed in a matter of months. I don’t think the feds will risk another bank run.

If you haven’t tried OpenAI’s ChatGPT, you are missing out. The advancement in AI technology looks real, which should be a big boost to productivity as well as new business opportunities. I think TAM (Total Addressable Market) of a lot of big techs has increased due to AI. Companies like Google are playing catch-up which should be a big boost overall.

Zuckerberg declared this year to be the year of efficiency for Meta. I think this is true for the whole tech sector. The industry finally realized the extra overhead expense that was a hang in the bottom line. The multiple rounds of layoffs should bring the house in order resulting in better earnings and redeployment of capital from free massages, and organic snacks to real innovation.

So, how do we play this? I think sticking to big tech is the safest and less risky way of investing in tech right now. Below are my recommendations which should be a basis for further research. Of course, this is not investment advice and should be taken with a grain of salt coz no one knows anything.

Meta – Year of Efficiency.

MSFT – Owns a piece of OpenAI

NVIDIA – Backbone of AI as it provides a platform to develop AI solutions

Alphabet (GOOG) – Bard

PLTR – I can’t get this off my mind.

This post is a quick thought I had this morning so please don’t take it too seriously.