The current situation is drastically different from the tech stock correction of 2022. Our base case remains that the Federal Reserve will only tighten monetary policy moderately, far less than before. Earnings growth in the tech sector remains strong, while semiconductor valuations are still below their long-term historical averages. Given the generally long debt maturities and continued economic resilience, we believe the impact of rising interest rates on corporate earnings should be more limited than in previous cycles. This expectation is also reflected in our AI-themed investment strategy, which tends to diversify investments across beneficiaries of AI infrastructure, platform companies, and some defensive tech companies.
