Market's tech focus is 'shortsighted,' with a broader bull run coming, portfolio manager says

cnbc.com:

The market's affinity for Big Tech stocks this year is «shortsighted,» according to portfolio manager Freddie Lait, who said the next bull market phase will broaden out to other sectors offering greater value.

Shares of America's tech behemoths have been buoyant so far in 2023. Apple closed Wednesday's trade up almost 33% year-to-date, while Google parent Alphabet has risen 37%, Amazon is 37.5% higher and Microsoft is up 31%. Facebook parent Meta has seen its stock soar more than 101% since the turn of the year.

This small pool of companies is diverging starkly from the broader market, with the Dow Jones Industrial Average less than 1% higher in 2023.

The gulf between Big Tech and the broader market widened after earnings season, with 75% of tech firms beating expectations, compared to a fairly mixed picture across other sectors and broadly downbeat economic data.

Investors are also betting on further rallies as central banks begin to slow and eventually reverse the aggressive monetary policy tightening that has characterized recent times. Big Tech outperformed for years during the period of low interest rates, and then got a major boost from the Covid-19 pandemic.

However Lait, managing partner at Latitude Investment Management, told CNBC's «Street Signs Europe» on Wednesday that although the market's positioning was «rational» in the circumstances, it was also «very shortsighted.»

«I think we are entering a very different cycle for the next two-to-five years, and while we may have a tricky period this year, and people may be hiding back out in Big Tech as interest rates roll over, I think the next leg of the bull market — whenever it does come — will be broader than the last one that we saw, which was really just sort