What should investors do with tech stocks after a 21.5% H1 rally?

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What should investors do with tech stocks after a 21.5% H1 rally?

Tech stocks rally, which is largely driven by gains in semiconductor and computer hardware sectors benefiting from AI advancements, has outpaced the broader market by a significant margin in the first half of the calendar year.

At the same time, valuation concerns loom large as well. Tech stocks are currently trading at a 49% premium to the market, nearing levels seen during the dot-com bubble, and well above historical averages, noted Bernstein. However, the momentum in tech is receiving continuous support with expectations of rising AI adoption and potential economic recovery.

Bernstein recommended that investment strategies going forward should focus on a balanced approach, adding that investors should maintain a market-weight allocation to tech.

 

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