SocGen strategists tout US tech stocks even after big run

The Nasdaq logo is seen on the exterior of the Nasdaq MarketSite in New York

By Lewis Krauskopf

NEW YORK (Reuters) - The U.S. technology sector is poised for continued strength even after its stellar gains in 2023, helped by strong first-half earnings and broad interest in artificial intelligence and other tech-driven productivity gains, according to equity strategists at Societe Generale.

Tech and technology-related sectors drove the S&P 500's 24% gain in 2023, and many of those stocks are off to a strong start again in this year.

The result is that the tech-heavy Nasdaq 100's market value has grown to half that of the S&P 500 and 30% of a global MSCI equities benchmark, the SocGen strategists said in a note on Thursday.

"We are conscious that concentration risk is at its highest level ever for US and global equity indices," the SocGen strategists said in their note.

Still the strategists said they were staying overweight the U.S. tech sector. They expect the sector's earnings growth to accelerate in the first half of 2024, while economic indicators are also trending higher, and recommended investing in the equal-weighted Nasdaq 100 index.

Interest in artificial intelligence (AI) has picked up since the World Economic Forum in Davos, with assets under management in AI ETFs surging to highs and hedge-fund positioning in the Nasdaq 100 also climbing.

The firm pointed to its "Rise of the Robots" index, which includes 150 global stocks, as a way to invest in the "productivity theme."

(Reporting by Lewis Krauskopf; Editing by Chizu Nomiyama)