BPI Wealth stays bullish on tech

BPI Wealth, the investment arm of the Bank of the Philippine Islands (BPI), remains bullish on the technology sector despite growing concerns overseas about a potential artificial intelligence (AI) bubble in the United States.

Speaking at a press briefing last Thursday, BPI Wealth chief investment officer Tono Zialcita said the technology sector remains broadly diversified beyond AI, although he acknowledged that valuations of some AI companies appear elevated relative to their current earnings.

Diversified investments

“There’s no particular sector that is overly heavy. Our investments are diversified across multiple segments within the technology sector,” he said.

“Valuations of AI companies are somewhat high when viewed from a price-to-earnings perspective. But what we’ve been seeing are upward adjustments to earnings forecasts,” Zialcita added.

The United States has been at the center of the recent technology boom, highlighted by the record-setting $85.7-billion initial public offering (IPO) of SpaceX nearly two weeks ago.

The Elon Musk-led company is the first of several highly anticipated technology listings this year. AI firms OpenAI, the developer of ChatGPT, and Anthropic, the company behind Claude, have also reportedly taken confidential steps toward going public, setting the stage for what could become a race among major AI developers to reach the stock market.

However, questions remain about the valuations of many AI-focused firms. While some are estimated to be worth close to $1 trillion, many have yet to achieve profitability.

Late 1990s dot.com bubble

Concerns over cybersecurity, AI ethics, and aggressive industry expansion have prompted comparisons to the dot-com bubble of the late 1990s.

Zialcita emphasized that BPI Wealth’s technology exposure is not concentrated solely in AI companies, but is spread across the broader tech ecosystem, including semiconductors and other critical infrastructure supporting digital innovation.

“It will be a theme for the next 10, maybe even 20 years. Which particular technology theme will be in focus at that time may no longer be AI. It could be quantum computing,” he said.

Tech remains important

“But technology as a whole will remain important over the next couple of decades. The continued growth in earnings and the broadening impact of technology across industries should be beneficial. Valuations are a concern, but they are naturally correcting.”

Zialcita’s remarks came following the launch of BPI Wealth’s peso-denominated share classes for two of its global investment funds, allowing Filipino investors to gain exposure to international markets without having to hold or purchase US dollars.

The new offerings include the BPI World Technology Feeder Fund, which provides exposure to leading global technology companies through the BlackRock World Technology Fund, including Nvidia, Alphabet, Microsoft and Apple.