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Pictet investment adviser: technology stocks are not overvalued

Pictet investment adviser: technology stocks are not overvalued

Walter Liebe, senior investment adviser at Pictet Asset Management, believes tech companies are well-positioned and not overpriced.

'Modern tech companies have valid business models with specific products on the market in comparison with companies of the dotcom bubble period. Technology companies' valuations didn’t increase faster than global equities,’ Liebe said at DAB Investmentkongress 2017 in Munich.

He added that the valuations in the sector are way below the level of the technology bubble in 2000, when price-earnings ratios were  reaching 44.3 on average.

On 2 August 2017, price-earnings ratios of tech stocks reached 17.5, which is even lower than the MSCI World Technology price-earnings ratio at 19.1.

Robotics and autonomous cars

The asset manager also sees growing potential in the robotics space, as the industry’s sales are expected to increase by 36% by 2020.

He added that the real growth opportunities in robotics lie in the private sector. However, Liebe is less convinced when it comes to autonomous cars.

'The assisting systems in modern cars are precursors of autonomous driving, but in my view we are not that far from 2030.'

Digital revolution

Liebe said the digital economy is expanding and companies should invest in digital services in order to protect their market share and returns.

‘US researchers say we are experiencing a second machine revolution after the invention of the steam engine. It affects our thinking and penetrates every area of our everyday life.’

In his view this concerns specific traditional businesses, for example trade, which will be forced to face the digital world.

'We are experiencing a massive transformation of business models towards the digital world.'

Pictet invests in mega trends such as technology, robotics and cyber security via its own in-house funds Pictet-Digital-P USD, Pictet-Robotics-P USD and Pictet-Security-P USD

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