The Trump trade war may have triggered a reset button on the desire to own higher-risk tech stocks, but longtime enterprise software investor Robert Smith is not staying on the sidelines.
Smith told Yahoo Finance the AI opportunities for many tech plays remain too good to pass up.
“Right now they do,” the Vista Equity Partners founder and CEO said at the Milken Institute Global Conference on whether tech valuations are currently attractive.
“In some cases, the instances are because they haven’t realized a true potential and investors haven’t realized a true potential of gentrifying AI in these businesses. Not all of them will become a gen-AI. Some will not have a right to exist because they actually haven’t done the right work and understanding and having sovereignty and dominion over the workflows and data sets,” Smith explained.
The climate for momentum-ridden, higher multiple tech stocks has been volatile post-“Liberation Day” as investors recalibrate market risk.
Strong first quarter earnings reports from Meta (META), Alphabet (GOOGL), and Microsoft (MSFT) in the past two weeks have powered the tech-heavy Nasdaq Composite (^IXIC) to an 8.6% gain over the last month. That’s despite the likes of Apple (AAPL) warning the Trump tariffs would hit its cost base to the tune of $900 million.
Year to date, the Nasdaq Composite has slid 7%, worse than the 3% drop for the Dow Jones Industrial Average (^DJI) and 3% decline for the S&P 500 (^GSPC).
Meanwhile, IPOs have dried up, with hyped Nvidia customer CoreWeave (CRWV) being the last Big Tech name to debut in late March.
“After an improved first quarter for IPOs globally, with deal values up by 20% over the same quarter in 2024, global financial markets have more recently been impacted by heightened volatility and uncertainty, with a knock-on impact on the IPO landscape for upcoming quarters,” EY partner Fergal McAleavey said.
Read more about what business leaders and top political figures are saying at the 2025 Milken Institute Global Conference:
Treasury Secretary Scott Bessent aims to soothe nerves of international investors
Global investors to Trump: Speed up the trade war
Bill Ackman on his move to recreate Warren Buffett’s Berkshire Hathaway
Apollo CEO: I don’t agree with Warren Buffett on tariffs
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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