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(Bloomberg) — Big tech stocks are proving to be a safe bet for equity investors looking for a harbor in a “fragile” market brought about by the Iran war, according to Seema Shah at Principal Asset Management.
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Investors want strong balance sheets and positive cash flows, “the moat that sits around a lot of companies — and of course AI technology comes right at the heart of that,” Shah, chief global strategist at Principal, said Wednesday on Bloomberg Television’s Surveillance. “People are looking for something which is almost something of a safe haven.”
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Tech stocks’ role as a refuge marks something of a reversal from their historic role as high-risk, high-reward options compared with other equities and US Treasuries. They’re leading gains on the S&P 500 Index this quarter after dropping more than 9% the first three months of 2026, the sector’s first losing period in a year. Intel Corp., Advanced Micro Devices Inc. and Micron Technology Inc. are all up more than 100% this quarter.
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Chipmakers fell Tuesday, sending broader markets lower, after inflation data showed the effects of energy disruptions stemming from the war in Iran. But with Nasdaq 100 futures higher to start the day on Wednesday, the decline could prove to have been a pause following a surge of more than 50% since March 31.
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Shah warned that tech stocks aren’t immune to potential consequences of the war. Many of the inputs for semiconductor production come via the Strait of Hormuz, which has largely been shut by both Iran and a US naval blockade.
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“So much is still dependent on how this conflict is going to go,” Shah said. “There is a lot of optimism built into the market at the moment, which creates vulnerability.”
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Still, the declines in the immediate weeks after the start of the war in February presented an opportunity, Shah added.
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For long-term investors, there’s a chance “to get exposure to something which we believe is a secular theme, which is going to be here for a number of years, potentially decades,” she said.
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(This story was produced with the assistance of Bloomberg Automation.)
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