Tech Investing: Balancing Growth and Valuation in the Digital Age

The Influence of Price on Technology Investments for Investors

As technology investing continues to grow in popularity, many companies in the sector are experiencing high valuations. This has made it challenging for wealth managers and investors to access opportunities while keeping valuation in mind. Despite the challenges, some experts remain optimistic about the potential for growth in the technology sector.

One such expert is Dan Smith, a senior equity analyst at Canaccord Genuity Wealth Management. Smith acknowledges that current high valuations present a challenge when it comes to investing in technology. However, he believes that timing plays a crucial role in determining when to enter or exit the market to maximize returns.

Another expert who shares Smith’s cautious approach is Storm Uru, co-manager of the Liontrust Global Technology fund. Uru emphasizes the significant opportunities available to investors in the technology sector but is also cautious about excessive valuations. He maintains a target price for the stocks he owns and would consider selling them if they exceeded that price.

Uru also believes that focusing on companies that benefit from artificial intelligence (AI) rather than AI companies themselves can offer more attractive valuations. He sees more potential in companies that harness AI capabilities rather than those that solely focus on developing AI technology.

Smith agrees with Uru’s sentiment and prefers to look at companies that facilitate AI rather than those that develop it directly. By doing so, he sees more attractive valuations and can access the benefits of technological advancements while also considering valuation factors.

Overall, while there are challenges associated with investing in technology at present, experts believe that there are still significant opportunities available to those who are willing to take a cautious approach and consider both growth potential and valuation factors.

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