Veteran investor Mark Mobius has highlighted U.S. tech firms with ties to emerging markets as prime investment opportunities for the upcoming year.
What Happened: In an interview with CNBC, Mobius, chairman of the Mobius Emerging Opportunities Fund, emphasized the potential of companies leveraging technology to boost productivity.
Mobius pointed out that U.S.-based companies focusing on markets like China and India are strategically positioned for growth.
"I focus on those companies that are global in their scope, and producing and exporting and selling in these countries, because that's where the growth will be."
Mobius also mentioned the significance of companies involved in “accelerated information,” such as chip manufacturers, which are benefiting from rapid information processing capabilities.
His observations come amid an economic surge in semiconductor-producing emerging markets, with Taiwan leading in advanced chip manufacturing. Southeast Asian nations, particularly Malaysia, are also seeing increased foreign investment due to their chip production focus.
Despite concerns of a tech bubble due to high valuations of major tech stocks like Alphabet Inc., Amazon.com Inc., and Nvidia Corp., Mobius remains optimistic.
He believes the growth rates of these companies justify their valuations, and he expects continued strong performance from the “Magnificent Seven” tech giants.
Why It Matters: Mobius has been a staunch advocate for investing in emerging markets, particularly in Asia. In July 2023, he stated that he had no investments in the U.S., focusing entirely on international and emerging markets. This aligns with his current emphasis on U.S. tech firms with exposure to these regions.
Mobius has also warned of potential risks to U.S. markets amid recent volatility, noting a significant decline in the U.S. M2 money supply. This drop could impact discretionary spending, a key driver of economic growth.
Meanwhile, the surge in Nvidia’s stock has raised concerns about concentration risks for investors. The company’s shares have skyrocketed, driven by high demand for its AI chips.
However, this rapid growth has led to increased holdings by asset managers, posing potential risks if the stock takes a downturn.
Read Next:
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Wikimedia
