Tech Tour 2026: Technology Outlook
February 2026, From the Field
- Key Insights
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- Tech remains well-positioned to lead the market, driven by ongoing innovation and the accelerating impact of AI on productivity and economic growth.
- Hardware and component companies, especially in semiconductors, are expected to benefit most in the current phase, while late-stage, expensive software may face challenges due to pressures from AI advancements.
- The expansion of technology’s total addressable market is not a zero-sum game; multiple companies and segments can benefit simultaneously as AI and infrastructure build-outs continue to reshape the industry.
2026 Technology Outlook
Tony Wang:
The space race for AI is actually going to multiple moons.
Jennifer Martin:
Can you both kind of highlight a little bit of your thinking of the outlook for tech? Can tech continue to lead the market?
Tony Wang:
Yes, so my outlook is that tech is set up really well. I mean, it's been amazing that we've had kind of 30, 50% up years over the last three years, which is incredible. But I still think that the innovation curve is still early here. And AI is going to be going to supercharge the economy. I believe in this productivity boost increase idea. I think it's inevitable. I like to invest in inevitabilities. But I think it just depends on where's the economic value going to accrue to. And I think it's going to go to part of the system, the componentry. So, I think semi-cap, DRAM, HDDs, SSDs are going to see nice appreciation from here. I still think that the mainstay of the MAG7, they'll still continue to compound nicely. And then I do think software does look a little challenge if you're an expensive kind of late stage software and you're decelerating, I think these LLMs are really going to put a lot of pressure on. And then kind of the Accenture is kind of an interesting battleground stock here because they reoriented themselves to be like a Palantir and become going from AI loser to AI winner. So I think there'll definitely be some changes in terms of leadership. So it keeps things interesting.
Dom Rizzo:
I think everybody wants there to be change in leadership of the market, right? Everyone calls small-cap, mid-cap, international. And the reality is, I personally think, and look, I run a global tech strategy. I have great names all over the world. I'm happy, international was better performing than the US this year. But these companies grow so rapidly, are so well-positioned fundamentally, have the benefit of addressing billions of people. Right now, competitive intensity is increasing between them, which is resulting in a huge hardware build-out. And then the question is, when is that battalion handoff from the hardware to the rest of the ecosystem? When are we going to go from hardware has all the power back to a world where software and internet have the power? And like I said earlier, I think it's a five-year cycle. Let's see how I feel next year. But we just finished year three. And so that economic value, where does it accrue? Potentially, it's hardware for longer. Potentially, it's a transition. But that's the thing that you and I probably spend the most amount of time debating, thinking about, changing our minds about, going back and forth on it. Because this is the fundamental question for every technology investor in the world today.
Tony Wang:
And I think you were alluding to this earlier, but it's not a zero-sum game, and what's amazing is that, I think that the space race for AI is actually going to multiple moons, and it's not just one pond, but you see what Anthropic is doing with Claude, right? They're focusing on coding. Open AI is more enterprise, and so I think it's going to be…Interestingly, TAM expansion, just like semis. I remember we'd always talk, there's always a debate of who's going to win, Nvidia or AMD or Nvidia and Brocka. Well, they kind of all won. All their stock, they're more surfing the same wave, borrow your term earlier, of this cycle. So I think net-net, it is still TAM expansionary.
Dominic Rizzo, CFA
Portfolio Manager
Anthony Bruce Wang
Portfolio Manager
Jennifer O'Hara Martin
Global Equity Portfolio Specialist
Tech Tour 2026: Are big tech valuations still reasonable?
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