Liz Young Thomas

Investors should trim positions in high-flying tech/AI names and redeploy capital into the healthcare sector, which is poised to benefit from AI adoption but has not yet run up as much.

Investors are looking to equities to offset economic growth scares, and that leads them to technology stocks, particularly semiconductor stocks, which benefit from strong AI-driven spending, revenue gains, and rising earnings guidance. Even if consumer spending slows later in the year, risk appetite remains strong, supporting these stocks.

Liz Thomas explicitly said QQQ has experienced multiple compression since October highs, but earnings continue to go up, and she thinks the dislocation closes by prices going up, with multiples already rising slightly recently. Earnings growth should drive price appreciation as the disconnect between compressed multiples and rising earnings corrects through multiple expansion. LONG based on fundamental earnings growth and anticipated re-rating. If earnings growth stalls or multiples compress further due to market conditions.

"Software found its bottom or at least is in the bottoming process and investors are looking for ways to position in some of those that maybe were called falling knives before but now it is fallen." Software stocks have already been severely beaten down and are showing relative strength by bouncing on rough market days. Because software companies have high margins and are less directly exposed to physical supply chain and energy shocks, they offer a fundamentally sound area for investors looking to deploy risk capital. LONG software equities as they have completed their bottoming process and offer a high-margin refuge from physical commodity shocks. A broad market capitulation event or a renewed spike in long-term interest rates could cause further multiple compression in high-valuation software names.

"Software found its bottom or at least is in the bottoming process and investors are looking for ways to position in some of those that maybe were called falling knives before but now it is fallen." Software stocks have already been severely beaten down and are showing relative strength by bouncing on rough market days. Because software companies have high margins and are less directly exposed to physical supply chain and energy shocks, they offer a fundamentally sound area for investors looking to deploy risk capital. LONG software equities as they have completed their bottoming process and offer a high-margin refuge from physical commodity shocks. A broad market capitulation event or a renewed spike in long-term interest rates could cause further multiple compression in high-valuation software names.