Navigating technology sector volatility in 2026

The technology sector faced a challenging start to 2026, marked by disappointing corporate results, significant stock declines, and concerns about traditional business models. However, behind this volatility, massive investments in AI infrastructure have also emerged, which could define this year as one of the largest for CapEx in the history of this industry.

In this edition, Niraj Patel, Chief Equities Strategist, analyzes the sector's key developments, portfolio strategies adopted, and what to expect in the coming months.

A challenging start

Early this year, earnings season brought widespread disappointment, with the exception of Meta, which delivered solid results and optimistic guidance. The biggest negative surprise came from Microsoft, with Azure platform growth falling short of expectations. The company prioritized GPU allocation to its corporate applications division, raising concerns about defending its traditional software franchise.

Even more concerning was the revelation that approximately 45% of Microsoft's future revenue is tied to OpenAI, whose technology faces growing competition from Google's Gemini models. Since October 2025, Microsoft has lost approximately $1 trillion in market value.

The "SaaS-pocalypse" and software pressure

The software sector has accumulated nearly a 20% decline this year, in a movement dubbed the "SaaS-pocalypse." Fears that AI agents could disrupt traditional software models and reduce revenues intensified with launches like Anthropic's Claude Code and Claude Cowork, plus the new autonomous agent OpenClaw. Facing this uncertainty, we moved Salesforce from our Top Picks list to our Watchlist.

Simultaneously, Alphabet and Amazon faced declines after announcing significant increases in capital expenditures for 2026.

The infrastructure investment boom

The combined investment of Meta, Microsoft, Alphabet, and Amazon is expected to exceed $600 billion in 2026, possibly one of the largest aggregate CapEx levels in history.

While this concerns investors about free cash flow, it represents an unprecedented investment for infrastructure. We've seen sharp and accelerating demand increases for data centers, advanced GPU clusters, networks, power, and memory. Memory prices have surged parabolic ally, and according to Nvidia CEO Jensen Huang, have become one of 2026's biggest bottlenecks.

Our strategy reflected this view: we reduced Microsoft exposure and increased Nvidia exposure, believing that continued investment increases could benefit the company.

• Robotics: the conversion of Tesla’s Fremont Factory to produce Optimus robots, marking a strategic pivot in the sector;
• Space Race: the merger between xAI and SpaceX, creating one of the largest private companies in the world;
• Lunar Exploration: the Artemis 2 mission, scheduled for March, which will be the first crewed flight around the Moon in over 50 years;
• Conferences and Launches: Nvidia's GTC conference in March and ChatGPT 6 launch are scheduled for the coming months.

Although 2026 started with volatility, we continue to seek strategic opportunities. The magnitude of AI infrastructure investments could solidify this as one of the largest years of technology investment in history.

We remain attentive to market developments and committed to maximizing returns for our investors.