The company said it made $128 million in divestments from bitcoin after selling a portion of its holdings in March. Since then, Tesla has not disclosed any changes to its bitcoin holdings.
But Elon Musk has not been receiving good news lately. The technology sector, which in 2021 achieved a return of 29.85% according to the MSCI World Information Technology, so far in 2022 is down close to 10%, while the S&P 500 Information Technology index lost more than 9%, and technology heavyweight Nasdaq Composite lost about 12%.
The sector, like the rest of the sectors, is battling disruption to global supply chains, material shortages and rising transportation costs. And it is because of these factors that there is talk of a “techno-nationalism” on the rise. Europe aims to double its share of global chip production, raising its output to 20% by 2030. Shortages of supply chain components are forcing US tech companies to reduce reliance on China and reassess “just in time” manufacturing practices.
Among the most representative subsectors or themes in these funds are robotics and automation, e-commerce, biotechnology, cybersecurity, health innovations, cloud computing, social networks and some others that are part of our day to day and in which future expectations are very positive. Although, there were companies whose valuation was already very narrow. Some of the companies that appear in many of these funds are Facebook, Nvidia, Alphabet, Tesla, ASM International, Marvel, Amazon, Shopify, among others and where the US is the country with the greatest weight.
However, the adjustment that the prices of some of these actions have had and the fact that “cyclical and technological values are the ones that are offering the best figures”, according to Ben Laidler, strategist at eToro, means that the valuations have been adjusted.
But despite this sharp drop so far this year, the technology sector has led the market for much of the last decade, and the pandemic only accelerated that trend. But it is clear that we are entering a different environment, one where inflation takes the main role with data that continues to make many central banks question “temporary” and weigh the need for increases – aggressive or not in interest rates -, that could keep tech and growth stocks at bay for now. Growth stocks and technology stocks have higher expected future earnings, but they are those that do not generate much or no earnings at present and offer the promise of rapid growth and huge massive gains. But if inflation and interest rates rise, those future cash flows become less attractive today, they are discounted at higher rates.
Although the foregoing is true in the sense that the increase in rates can slow down certain technological actions, analysts assure that there are some funds that are better positioned than others and that they obviously have greater tools to select the best technological ones, and that therefore the same it is an opportunity to increase exposure by tranches.
Jim O’Donnell, Director of Citi Global Wealth advised: “Many of the technologies that allowed the world to survive and thrive during Covid are the ones that will transform commerce and communications in the future. Here are some of the unstoppable trends customers should be aware of and consider looking out for.” exposure in their portfolios in 2022″.
Source: Ambito
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