Societe Generale (OTC:) strategists issued a warning to growth-focused investors about the possibility of a bubble burst in the US technology sector.
The banking giant highlighted the significant market capitalization of US Tech within the and pointed to the recent surge in smaller stocks contrasted with a decline in larger tech companies, including the ‘Magnificent 7’ mega-caps.
“With the US Tech sector now accounting for some 35% of the S&P 500 market cap, investors need to be on high alert for a potential bursting of the bubble,” Societe Generale global equity strategists wrote in a note.
The commentary from SocGen’s team of analysts reflects concerns that the equity market may be on the verge of a downturn, reminiscent of the first full-blown bear market since the 2008 Global Financial Crisis.
The bank also alluded to historical patterns of financial bubbles and crashes, suggesting that a simple reversal in price momentum could…
