Rudi's View | 10:00 AM
Thoughts and observations behind the savage bear market that has gripped Quality and Growth stocks since mid last year.
By Rudi Filapek-Vandyck, Editor
Behind The AI Threat Narrative(s)
By Rudi Filapek-Vandyck, Editor
The persistent de-rating of global technology stocks is far from the only trend that has characterised the past eight months of ASX price action, see for example the spike in volatility in prices of gold, silver, bitcoin and uranium.
On Monday, as I am writing this week's Weekly Insights, share prices are rallying from pricing levels that are well down from levels recorded mid last year.
I am not confident that what we are experiencing is a bottoming out in a nasty and prolonged bear market for businesses that previously could do little wrong.
I do note sector analysts and savvy investors are starting to push back against the market's indiscriminate de-rating of companies linked to software, AI or technology broadly.
This might well prove the first embryonic step in countering what appear to be overly simplistic narratives that currently weigh on affected share prices.
The fact Car Group's ((CAR)) half-yearly result simply met consensus forecasts and its share price rallied by double digits on the day is one extra source for optimism.
In contrast, the early beginnings of the local results season saw no net benefit for a market-beating financial performance by ResMed ((RMD)) and a swift harsh punishment for REA Group ((REA)) post a market update that 'missed' on a higher tax rate and slightly lower growth guidance for the second half.
Car Group management also reported steady progress on AI with several of its portals now enriched with conversational search.
More investing automatically translates into (some) margin pressure, but management seems confident it can control this dynamic without any nasty outcomes on the horizon.
It certainly drew praise in an early assessment from analysts at Citi, who see potential for the strong operational momentum to offset headwinds from a stronger AUD in the current financial year.
Despite the firm rally on Monday, Car Group shares are trading nearly -50% below FNArena's consensus price target in a sign of just how savage the selling has been for this type of potential future AI victim.
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