Semiconductors and software are two areas in which the technology industry is expected to make a profit next year, Subramanian said. Semiconductor is sensitive to the trend of GDP and will perform well during the economic recovery in 2021.
While Subramanian prefers semi-automatic stocks to software stocks, she added that software is still attractive because its not as crowded as other areas of the technology industry. In a recent report, her team stressed that software investment will accelerate in 2020, a trend likely to continue for several years.
Subramanians team also points out that investors trading congestion is a risk in the technology sector. According to a survey of global fund managers released by Bank of America in mid November, US technology stocks and growth stocks are considered to be the most crowded trading.
u201cu2026 The leadership of that small group of stocks is driven by the buying of all people. Its driven by individual investors, institutional investors, hedge fund investors (almost) the world looks at more faang.
Subramanian points out, if you look at the very crowded areas of todays technology industry, they are mainly concentrated in TMT, media, interactive entertainment, interactive media and services, which are all communication services, not information technology.
She added that the software and semiconductor markets are not as crowded as in the communications services sector.
Since this year, the faang portfolio has pushed us stocks to new highs. The NASDAQ index rose 0.48% to 12094.40, driven by faang on Wednesday, setting a new closing record.
Faang mostly closed up on Wednesday, with apple up 0.75%, Amazon up 2.15%, NYSE soaring 0.44%, Google up 0.01% and Facebook down 0.48%. Source: Science and technology innovation board daily editor: Yang Bin_ NF4368
Faang mostly closed up on Wednesday, with apple up 0.75%, Amazon up 2.15%, NYSE soaring 0.44%, Google up 0.01% and Facebook down 0.48%.