Tech had a rough summer. Where these investors see opportunities ahead
It was a cruel summer for some of the most popular tech trades. The QQQ ETF , which tracks the Nasdaq-100, is flat since Memorial Day, while the VanEck Semiconductor ETF (SMH) and the Roundhill Magnificent Seven ETF (MAGS) are down slightly in that time. The S & P 500 , meanwhile, is up around 3% since then. Questions about the return on investment of the artificial intelligence buildout, the financing of data centers and headwind of higher yields will remain after Labor Day. But many investors see a change of trajectory as Wall Street returns from holiday to a September with a number of events with the potential to move markets. These include a Federal Reserve rate decision, a meeting between President Donald Trump and Chinese President Xi Jinping and an Apple product launch event under new CEO, John Ternus. It could be a September to remember for the markets and investors. Here is how a select group of investors sees the post holiday landscape. The tech trade While the QQQ, SMH and Mag7 are underperforming, there have been big surges in cybersecurity, software and memory stock over the summer. “I think you are going to see a catch up trade in tech,” said Dan Ives of Yorkville Ives. “A lot of investors that were caught offsides are now going to be playing catch up. Not necessarily on the hyperscalers, but in infrastructure, cybersecurity and software. The ‘SaaSpocalypse’ was a fictional narrative.” Indeed, the iShares Expanded Tech-Software Sector ETF (IGV) is up more than 9% since Memorial Day. DRAM , an ETF made up of memory names, has surged 16% in that time, along with the Amplify Cybersecurity ETF (HACK) . IGV DRAM,HACK mountain 2026-05-25 IGV, HACK and DRAM since Memorial Day Ives’ top picks include Palantir Technologies , Snowflake , Crowdstrike and Palo Alto Networks . Tina Byles Williams, founder and chief investment officer of Xponance also sees a bullish path forward for the tech names tied directly to the AI buildout. “Industry estimates show compute still dominates spend and the roughly 6-year decay of GPU efficacy will continue to fuel capex,” said Byles Williams, “But data centers, power, networking and cooling are becoming major bottlenecks.” Overlooked opportunities Nicolas Janvier, head of equities for North America at Columbia Threadneedle sees opportunities in the Russell 2000 , citing 78% earnings growth in the second quarter. .RUT .SPX,QQQ YTD mountain Russell 2000 vs S & P 500 and QQQ in 206 “Really strong earnings growth that you are seeing in small caps is driving for the first time in quite a while, small caps outperforming large caps.To the extent that earnings growth continues, we would expect that outperformance to continue,” said Janvier. Jimmy Lee, founder of Wealth Consulting Group, thinks a Fed rate hike is unlikely and believes an inflection point in the housing market and related stocks is nearing. “Housing has been locked up for so long and people are stuck in 3% mortgages, but they would like to move,” said Lee. “I think when rates move lower you start to see Home Depot , Lowes doing better when people buy houses, they renovate and spend more money. It’s just such a huge part of ‘normal people’s’ balance sheets.” Home Depot is flat since Memorial Day, while Lowes has fallen more than 6% in that time. Michael Persaud, a portfolio manager and financial advisor with Morgan Stanley, said most investors can benefit from increased exposure to commodities. “I like having exposure to gold and silver as a portfolio diversifier given the uncertainty around rates inflation and fiscal policy,” said Persaud. “I want exposure to secular growth and defensiveness rather than making a one dimensional bet on any single sector.” Steve Sosnick, Chief Strategist at Interactive Brokers sees upside in copper and other basic materials. “If you think the AI build is still happening you need copper and you need basic materials to make that happen” said Sosnick. “I’m leaning towards those as part of the broadening trade.” Ultra-high net worth insight Even with potential headwinds, ultra-high net worth investors continue to see major opportunities in the US equities markets. A poll by Long Angle,a group whose members portfolios between $5 million and $100 million, showed 53% of members are focused on US equities. The poll encompassed 417 responses and took place between April 21 and Aug. 27. “A lot of our members have made a great deal of money in tech stocks. There are many members who now 20% of their portfolio is in a single tech stock or 50% of their portfolio is in a single tech stock,” said Tad Fallows, founder of Long Angle. “That’s not because they made that big of an allocation, but many of them are up 10, 20 fold, 30 fold on these on these either because they work there or they got conviction early.” Long Angle also found Alphabet is the stock that members would invest in today and hold for a decade. But Fallows is also bullish on the potential opportunity in natural gas and related stocks, citing Henry Hub spot prices declining since 2000 with demand for electric generation spiking due to data center demand. “If we build, if we make enough chips and build enough data centers you are going to need increased electricity production to play out. We are not all the sudden going to 10x our wind capacity or 10X our solar or nuclear capacity,” said Fallows about the upside potential and stocks of producers, “If prices double, their costs nowhere near double so margins really explode. Most of that price increase drops to the bottom line.” EXE EQT,RRC YTD mountain EXE, EQT and RRC year to date Top picks for Long Angle include: Expand Energy , EQT and Range Resources . Charlie Garcia,founder of R360, a group for investors with more than $100 million net worth, said members are also bullish on equities with a focus on defense as tension remain between the US and Iran as well as Russia and Ukraine. “I think everyone though the Iran War would be over by now,” said Garcia, “Defense is a big place where our member are, we think it’s a good place to be over the next couple of years.” R360 members top defense pick is Rolls Royce and holdings include RTX, Northrup Grumman and General Dynamics. Garcia says member are also investing in cryptocurrency as a way to play the agentic AI. “The agentic is real, more and more companies are growing,” said Garcia. “As agents are growing they need to spend money and a year from now we are going to see a major boom in Bitcoin, Ethereum, Solana specifically that agents are using to build.”
