Despite Big Tech slump, keep investing: focus on AI and cash-generating companies

Despite recent weak stock performance among Big Tech companies, a case has been made for why investment should continue. Given current high inflation and the possibility of future rate cuts, selecting companies that can endure this period and grow is important. In this process, the analysis holds that companies with revenue consistently growing at double digits or more, able to generate software sales using artificial intelligence (AI), and able to generate stable cash will ultimately be the Big Tech names that prevail.

In particular, it outperformed QQQM, which tracks the Nasdaq 100 index, and its expense ratio is kept very low at 0.08%. In terms of number of holdings, QQQM includes 107 stocks while XLK concentrates on 76 stocks, offering an efficient diversification effect.

Continued growth in the semiconductor industry is expected to lift semiconductor equipment stocks together. The semiconductor market and equipment investment are closely linked, and analysts see this flow as inevitable. In particular, the U.S. semiconductor market has a relatively long cycle compared with Korea's, so despite short-term cycle changes, it is expected to continue an upward trend from a long-term perspective.

The ETF mainly holds global hyperscale companies such as Google, Amazon, and Microsoft, and its notable feature is that it includes SpaceX. SpaceX appears to have been included because it is judged to be closely tied to AI business. Other holdings include Oracle and Meta. AI HY also has the advantage of allowing holdings to be replaced through active management.