The technology sector, despite the buzz around artificial intelligence (AI), is experiencing a broad weakness, with many companies still struggling with the recession that started in 2022, according to investors and recent financial reports.
“When you look at technology outside of AI, there’s not that much happening,” stated Tony Kim, head of technology investing at BlackRock’s fundamental equities division.
Traditional tech areas such as software, IT consulting, and electronic equipment production for sectors like manufacturing and the auto industry have faced challenges, including weak demand and the aftermath of overexpansion and overstocking during the COVID-19 pandemic.
Facebook co-founder and current Asana CEO, Dustin Moskovitz, recently described the situation as an “unwinding of the over-hiring and overspending” seen at the start of the pandemic. Recent financial reports reveal that a majority of large tech firms have been growing more slowly, while many smaller ones are actively shrinking.
Investor enthusiasm for AI-focused companies has waned since early summer, leading to predictions of a prolonged shift of investor attention from Big Tech stocks to sectors like financial services and industrials.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
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