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Question asked 23/08/2025

US Tech

Does MM have a position on US tech in the current market and which companies are most likely to benefit from the 4th industrial revolution in AI? I've been watching Salesforce CRM and Service NOW for some time, waiting for the right entry point. Both have dropped over 15%, but I'm nervous about the timing as valuations are still high. I recently sold out of Snowflake at $220 and it's since dropped over 15% as well.

Answer

Hi Nick,

We do own some US tech stocks in our International Equities Portfolio, with well-known Alphabet (GOOGL US) and Microsoft (MSFT US) two of our cornerstone holdings. These are two top quality companies who have been trading around their all-time highs in recent weeks/months. Like much of the market they are trading on the “rich” side from a valuation perspective which is to be expected with global equities posting fresh highs on an almost weekly basis.

With US reporting season going well and the Fed poised to cut rates 4 times over the next year valuations can stay “higher for longer”.

In terms of AI, we believe its one of the main reasons stocks keep pushing higher as investors see it as a catalyst for higher future earnings, efficiency gains, and competitive advantage across multiple sectors. However, we all need to be diligent on this front as with all new financial evolutions there will be plenty of twists in the road – at this stage we like where MSFT and AMZN are placed:

We like how MSFT are commercialising AI across its products and services to enhance productivity, automate tasks, and support business operations. Key initiatives include Microsoft 365 Copilot for content creation and data analysis, Windows Copilot for personalized assistance, and Azure AI services for developers and enterprises to deploy AI models. They have abroad customer base, and as we’ve written many times, we think this is a lower risk way of playing AI, with a very high probability that they’ll be a winner whatever way AI evolves over time.
AMZN uses AI across its business to enhance customer experiences, streamline operations, and drive innovation. Key applications include personalized shopping and Alexa improvements, AI-powered warehouse robotics and autonomous delivery, and AWS AI services like Amazon Bedrock and Amazon Q for developers and enterprises.

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LAST UPDATED 20/08/2025 09:16

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