Maximizing Returns in Tech Investing: Navigating High Valuations with AI Focus

The Influence of Price on Technology Investments for Investors

Investing in technology has become increasingly expensive with high valuations for many companies in the sector. Wealth managers and investors are looking for ways to access opportunities while keeping valuation in mind. Timing plays a crucial role in determining when to enter or exit the market to maximize returns.

One such investor is Dan Smith, a senior equity analyst at Canaccord Genuity Wealth Management. Smith acknowledges the challenge of investing in technology with current high valuations but believes that by focusing on companies that facilitate AI, rather than AI companies directly, investors can access more attractive valuations. If a stock exceeds the target price, he would consider selling it.

Storm Uru, co-manager of the Liontrust Global Technology fund, emphasizes the significant opportunities available to investors in the technology sector. However, Uru is cautious about excessive valuations and maintains a target price for the stocks he owns. By focusing on companies that benefit from artificial intelligence (AI), Uru believes that investors can find more attractive valuations. He also warns against investing too heavily in AI companies themselves as their high valuations may not be sustainable.

Investors who want to take advantage of technological advancements while considering valuation factors should look at companies that harness AI capabilities rather than investing directly in AI companies or those with overinflated values. By doing so, they can access new opportunities while minimizing risks and maximizing returns.

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