US stock tantrum: Price bubble? Safe haven sector?

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Tech stocks listed in the US are rallying, prompting speculation on whether their performances are nearing a peak.

This speculation has been growing since earlier in July when Apple posted its longest winning streak since August 2014.

AFP Photo

Adding to that, Google’s parent Alphabet is seeing market value close to 700 billion US dollars thanks to the tech stock tantrum.

If it continues to rise, it will be the second tech firm worth 700 billion US dollars after Apple.

But there are still concerns that the US economy is not yet running at full speed and tech stocks don't seem to be affected by US economic policy shifts as much as other sectors such as banks, healthcare and exporters.

That's why some arguments hold that the current uncertainties over the US tax policy and economic stimulus may be actually moving capital into safe-haven tech space.

“At least some indicators seem to show continued growth momentum going forward,” said Patrick Bradshaw, Chief Strategist of the Silvercrest Asset Management. “Until we see something to change that, I don’t think you are going to see an end to the bull market.”

But still, many analysts warn that there may be a price bubble in tech stocks, reminding people of the tech stock collapse 20 years ago, when many Internet-based companies, commonly referred to as dot-coms, were founded but failed.