Tse Lei
2024-05-13

Tech Stocks: Inflation Hedge or Bubble?

A new survey reveals that some investors view large-cap US tech stocks not only as bets on innovation but also as potential inflation hedges.

While gold, traditionally considered a safe haven, remains the top choice for 46% of respondents, nearly a third prefer tech giants.

This reflects the growing dominance of companies like $NVIDIA Corp(NVDA)$  ,$Amazon.com(AMZN)$ , and$Meta Platforms, Inc.(META)$  in the US economy, leading to stable profits and resilience during market downturns.

Trading Opportunities: Chinese EV Stocks Face Headwinds

With the likelihood of interest rate cuts diminishing and tariffs on Chinese-made EVs on the horizon, $XPeng Inc.(XPEV)$  and $NIO Inc.(NIO)$   are expected to face market challenges.

This could lead to a decline in their stock prices, presenting a potential short-selling opportunity for profit-seeking traders.

Overall, the market remains in a cautious mode as investors await key economic data and Fed guidance. While tech stocks are seen as potential inflation hedges, Chinese EV manufacturers could face headwinds due to interest rate and tariff concerns.

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