As the US tech giants underperform, a new crop of AI-exposed stocks are drawing investors’ attention.
“The Magnificent Seven tech giants, which powered the market higher though 2024, have underperformed significantly this year,” observes John Marshall, head of Derivatives Research in Goldman Sachs Research.
“This makes it look like investors are losing their taste for the AI trade,” Marshall says, but to the contrary, buying activity from retail investors has recently risen to a two-year high, with much of that activity focused on a particular set of tech companies.
“Retail investors are buying tech stocks which could benefit from integrating AI into their businesses.” Marshall says. “These companies aren’t building AI, or streamlining their businesses; they’re finding new revenue opportunities.”
“The AI trade is still on,” Marshall concludes. “It’s just different.”
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