The technology market is currently going through a phase of adjustment after excessive optimism around artificial intelligence (AI). Stocks of Big Tech giants (Alphabet, Meta, Amazon, Microsoft) were shaken by announcements of massive AI infrastructure spending, raising concerns about return on investment and the real economic impact of these technologies. While some tech companies and software publishers experienced significant corrections, analysts and experts view this movement as a “healthy reset,” allowing expectations to be recalibrated and valuations to stabilize. At the same time, chip and memory suppliers, highly demanded by AI data centers, are experiencing spectacular growth, exemplified by stocks like Sandisk (+150% year-to-date).
Current Economic Environment
Sector Volatility and AI Concerns
- Software/SaaS stocks have fallen more than 20% since the start of the year, in a movement dubbed the “SaaSpocalypse.”
- Risk aversion has intensified for tech stocks with high AI exposure, and investors are questioning the winners and losers of AI.
- AI start-ups such as Anthropic have added pressure by launching disruptive tools for the legal sector and SaaS.
Opportunities for Component Suppliers
- Chip and memory manufacturers are benefiting from skyrocketing demand driven by the growth of AI data centers.
- Companies like Sandisk have seen profits and valuations soar (+150% YTD), reflecting the structural growth of the AI components market.
Market Dynamics
- Corrections in certain segments (software, cryptocurrencies, precious metals) have helped rebalance valuations.
- The technology market remains fundamentally strong, supported by massive infrastructure investments and sustained demand for AI solutions.
Investment Recommendation
Why Invest Now?
- Healthy reset of tech valuations: The recalibration of AI expectations provides attractive entry points for strategic investors.
- Chip and memory suppliers: Companies serving AI data centers benefit from structural high demand and have solid medium-term growth potential.
- Sector diversification: Combining tech leaders with corrected SaaS stocks and component suppliers allows investors to capture potential rebounds while limiting specific risk.
- AI as a structural growth driver: Despite short-term adjustments, AI remains a long-term growth factor for the entire technology ecosystem.
Points of Caution
- High volatility: Software and crypto stocks may continue to fluctuate sharply.
- Margin pressure: Massive AI infrastructure spending could temporarily impact hyperscaler profitability.
- Excessive optimism risk: Overly high expectations on AI project ROI need to be monitored.
Conclusion / Recommendation
Invest selectively and strategically (Buy with Focus):
- Primary opportunity: Chip/memory suppliers for AI and data centers.
- Secondary opportunity: Corrected SaaS and tech leader stocks.
- The current environment offers a healthy valuation rotation, allowing investors to reinvest in fundamental segments while managing volatility.