Tech and FX: short-term volatility may cloud long-term trend in Daily Currencies Ratings 08/06/2026 Tech stock fundamentals continue to look solid It has been a volatile week for tech stocks, but the way we look at the broader technology markets is that the fundamentals for the semiconductor sector continue to look strong. This is because we expect investment in AI data centres to continue. We are also comfortable with current valuations for the equity sector, as the two-year forward-looking price earnings ratio for the Nasdaq continues to trade around its historical average, which is a low 20s earnings multiple. As the equity valuations are based on forward-looking earnings, it is important to note that for many names, FY27 sales expectations are being revised higher. Volatility may increase on technical market factors However, risks arise on the back of technical factors. As the market expects a couple of blockbuster IPOs, such as SpaceX, Anthropic and OpenAI, investors may look to rebalance portfolios, to make room for new investment opportunities. This could lead to some selling pressure for established benchmark names. Also, large technology platforms are well into a heavy investment cycle. So far, they have been able to raise the required cash from existing cash flow and additional debt. However, they are now increasingly resorting to equity financing, as we have witnessed from Alphabet’s recent equity offering. Also, as expectations for growth are high, any disappointment on projected growth may lead to a price adjustment of the respective stock. This is our take of the Broadcom sell-off, yesterday. This becomes especially relevant as the macroeconomic outlook becomes more uncertain. The chart below shows that the world’s largest technology companies are expecting to invest more than US$700bn in 2026. Our fundamental outlook on the semiconductor sector remains positive. Large technology companies are ramping up compute capacity to capture market share in the