Wealth Managers Bet on Tech Resilience Despite July Volatility

Willem Sels, global chief investment officer at HSBC Private Bank and Premier Wealth, maintains an overweight position in US stocks. He points to a vital shift: the market is becoming less dependent on the 'Magnificent 7' tech giants as small caps and cyclicals participate more fully. While tech valuations remain elevated, Sels argues that risk is now concentrated in select niches rather than the broader sector. Data supports this resilience; by August 10, the S&P 500 had climbed 13.3%, with the so-called 'Forgotten 493' companies outperforming the tech heavyweights.

Franklin Templeton Investment Solutions echoes this optimism, projecting over 20% earnings growth for US and global equities over the coming year, with emerging markets expected to see 35% growth. Despite geopolitical risks and inflation concerns, the firm views recent volatility as a healthy reset for stretched valuations. Patrick Ho, chief investment officer for North Asia at HSBC, highlighted that while semiconductor equipment stocks faced a 32.5% decline in July, system software gained 17.9%, illustrating the internal rotation occurring within the sector.

While Indosuez Wealth Management and Pictet Asset Management also signal positive outlooks for technology and AI-related assets, not all regions share this confidence. Franklin Templeton remains underweight on the euro area and Australia, citing energy-related inflationary pressures and weak domestic growth. For these managers, the underlying fundamentals of AI adoption remain the primary driver for long-term portfolio strategy, provided investors remain selective as valuations recalibrate.