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Since my last bullish publication on the Technology Select Sector ETF (NYSEARCA:XLK) in October 2023, it has appreciated by over 20% and now trades at a little over $200. This one comes three months later but in a crucial week, both
XLK ETF: A Better Way To Invest In Microsoft But Volatility Comes First
Summary
- The Technology Select Sector ETF has appreciated by over 20% since my last bullish publication and now trades at a little over $200.
- This time, my positive forecast on the tech ETF is based on top-holding Microsoft and other software plays likely to benefit from AI moving towards the exploitation or usage phase.
- XLK is undervalued compared to Microsoft and Nvidia, presenting a potential target price of roughly $223.
- This represents a fair target given that volatility risks are associated with the Federal Reserve's interest rate policy.
- There are also Apple-related risks as tech earnings season looms.
As a tech-focused industry Research Analyst, I aim to provide differentiated insights, whether it is for investing, trading, or informational reasons. For this purpose, I am not a classical equity researcher from the financial sector, but, I come from the IT world as the Director of Keylogin InfoTech and my insights are based on my own experience investing for 25 years.Also, my research is often backed by analytics and I make frequent use of charts to support my position.Based on losses during the GFC, I am often moderate and focus more on the direction and look for strategies to preserve capital. As per my career history below, I have wide experience, initially as an implementer in virtualization and cloud, and I was subsequently a team leader and project lead, mostly working in telcos.I like to write around themes like automated supply chains, Generative AI, telcos Capex, the deflationary nature of software, semiconductors, etc. and I am often contrarian. I also cover biotechs with more of a "techbio" focus.I have also been an entrepreneur in real estate ( a mediocre one), a business owner, and a farmer, and dedicate at least 5 hours per week to working on a non-profit basis. For this purpose, I help needy families by providing sponsored work and contributing peer reviews and opinions for enterprise tech.My investment journey started in mutual and indexed funds before later opting for individual stocks. Got a lot of experience in the 2008/2009 crash when I lost a lot due mostly to wrong advice. Since then I have done my research and have fallen in love with Seeking Alpha because of the unique perspectives it provides to someone investing hard-earned money as well as access to some of the best analysts.
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This is an investment thesis and is intended for informational purposes. Investors are kindly requested to do additional research before investing.
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