Should you limit exposure to US tech stocks?

An end to the AI boom would shake both US funds and global trackers. Here’s one way to trim exposure to US tech stocks

American flag with stock trend
(Image credit: Getty Images)

It would be quite a coincidence if the AI boom turns into a bust on the 25th anniversary of the end of the dotcom bubble, and we should be wary about jumping to that conclusion. People are very good at seeing patterns where there are none and certain things (round numbers and big anniversaries) tend to trigger that. Many of us are sub-consciously looking for signs of a crash.

Still, markets are more on edge than they have been for a while. In particular, they feel more jittery than they did in 2022, when rapidly rising interest rates provided a very fundamental reason for investors to rejig their portfolios. The latest shifts are more about sentiment: investors may be questioning whether they should put so much trust in American exceptionalism.

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Cris Sholto Heaton

Cris Sholto Heaton is an investment analyst and writer who has been contributing to MoneyWeek since 2006 and was managing editor of the magazine between 2016 and 2018. He is especially interested in international investing, believing many investors still focus too much on their home markets and that it pays to take advantage of all the opportunities the world offers. He often writes about Asian equities, international income and global asset allocation.

Cris began his career in financial services consultancy at PwC and Lane Clark & Peacock, before an abrupt change of direction into oil, gas and energy at Petroleum Economist and Platts and subsequently into investment research and writing. In addition to his articles for MoneyWeek, he also works with a number of asset managers, consultancies and financial information providers.

He holds the Chartered Financial Analyst designation and the Investment Management Certificate, as well as degrees in finance and mathematics. He has also studied acting, film-making and photography, and strongly suspects that an awareness of what makes a compelling story is just as important for understanding markets as any amount of qualifications.