AI Wave Continues to Power Technology Earnings Boom

In investing, the goal is to find assets that appreciate. That can be accomplished in different ways. One way is to find businesses that aren’t growing very fast but can be purchased at a low enough valuation that the investment can perform well. Another way to find potentially good investments is by identifying businesses (or groups of businesses that make up an index) that are growing rapidly but the market underestimates that growth. Some refer to this as “growth at a reasonable price” investing. Whatever style of growth an investor might pursue, it’s clear that finding growth that the market doesn’t expect may be a path to success. That’s what we see in the technology sector currently — a sector with very strong earnings growth that, in our view, is not being sufficiently rewarded in the marketplace due to ongoing AI skepticism.