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What to do with tech?

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Question asked 21/02/2026

What to do with tech?

So what do we do about our tech exposure? Like the MM portfolios, mine has also suffered at the hands of the tech sell off. I’ve watched my tech stock values drop and even started adding to positions in December and January (I note MM also had that strategy adding to XRO and noting it would be buying CAT if it didn’t already have exposure). And then watched those shares drop 30% more. MM is currently exposed through WTC, XRO, CAT, 360. I know that you sold out of CAR at the start of February to reduce your tech exposure, but you still have those tech stocks in the portfolios currently down significantly. So, what do we do? Wait and see? Are you planning on trimming anymore or waiting to see when it turns around to increase the exposure? With such a huge paper loss of the values of these companies, it’s hard to know what to do. Not looking for specific advice. If you can speak to how you are thinking about your current tech exposure and the fact that you are down significantly on those stocks. Whats the plan?

Answer

Hi Josh,

Arguably the most topical question in today’s report. We discussed the subject in Wednesdays webinar Here as we like yourself consider how best to negotiate this rapidly evolving landscape. A couple points worth reiterating:

We have trimmed our tech exposure, not due to specific issues with companies earnings, but from a risk perspective – remember “invest to sleep.”
If/when companies convey a clear plan towards AI their stocks can bounce hard as we saw with Technology One (TNE) and Hansen Technologies (HSN) this week.

In the webinar we outlined the three phases we believe will play out:

Phase 1: Indiscriminate selling as investors reduce weights to technology overall due to higher uncertainty feeding into higher risk inputs. This phase we believe has largely played out.
Phase 2: Evidence – we look for evidence of how companies are dealing with AI threats and opportunities. Those companies with credible, aggressive rather than incremental plans around AI will bounce back.
Phase 3: Confidence – build confidence and increase weights overall, and/or change the horses we are backing to those demonstrating a clear and credible approach to AI.

AI will be a boom for some, and a huge risk for others. We just don’t have a clear handle on that right now, hence lower weights.

We appreciate looking at stocks down materially is uncomfortable, however, with the correct weightings in portfolios, what’s playing out in one sector should not destroy a portfolio. We currently have zero exposure in the income portfolio which makes total sense, and between 10-15% in other strategies. This has been reduced, but now we’re in the evidence gathering phase to build more confidence around how this may all play out.

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ASX200 Software and Services Index

LAST UPDATED 19/02/2026 11:37

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