The attractiveness of technology stocks with AI potential is rising again on the stock markets, as the markets are not expecting any further interest rate hikes and are even speculating on interest rate cuts. As a result the technology sector is once again becoming the focus of attention.

In 2022 the technology sector as a whole suffered, as many companies are reliant on the hope of future profits and dividends. Repayment of invested money therefore often takes a long time, which plays an important role in equity experts’ valuation models, as they take future financial returns into account.

The “Big Four” (Apple, Microsoft, Alphabet (Google) and Amazon) are an exception, as they already generate high profits and sometimes offer positive returns, such as share buybacks at Apple.

Artificial intelligence (AI) exerts a fascination. Microsoft has caused a stir with the ChatGPT programme and its involvement in OpenAI, while Google has developed the text robot “Bard” and Amazon is planning AI customer advice. Apple is also expected to become active in this area, and it is precisely these heavyweights that lead the technology sector.

It is important to note that the performance of the “Big Four” is also crucial for index investors, as they have accounted for around 20% of the S&P 500 for years and influence the entire US market, which makes up around two-thirds of the MSCI World Index.

By contrast, an equally weighted calculation variant of the S&P 500 shows hardly any growth. Although the market as a whole is not so strong, the heavyweights are driving the share price. However, investors should also keep an eye on the risks, as Bank of America already sees a small AI bubble on the stock market and hopes of an imminent interest rate cut by the Fed contradict the statements of some central banks and the assessments of many economists.