The tech momentum trade driving market gains is showing no signs of slowing down, according to WisdomTree’s Jeremy Siegel. In a recent interview, Siegel stated that the momentum trade on tech and AI-related stocks is still going strong and is likely to continue for a lot longer than many people expect.
Despite concerns of a potential bubble, Siegel believes that the current market is not in a bubble territory, as earnings are supporting the record-high stock prices. He pointed out that companies like Nvidia, which are leading the charge in the tech sector, are solid and not overvalued like some of the companies during the late 1990s tech bubble.
Siegel forecasts that over the next three to five years, stocks will outperform bonds and deliver real returns of about 5% after accounting for inflation. He emphasized that the momentum trade in tech stocks, such as Nvidia and Broadcom, has been driving significant gains in the market and is likely to continue attracting investors.
With the S&P 500 up 14% year-to-date and the Nasdaq 100 up 17%, Siegel’s optimistic outlook on the tech momentum trade suggests that investors may continue to see strong returns in the coming years. As long as tech stocks continue to deliver solid performance, Siegel believes that the momentum trade will persist, providing opportunities for investors to capitalize on the market gains.
