How To Position Yourself In Technology Stocks

This continues – not unabated and in a staggered trajectory.

Federal debt is exploding higher, and readers need to put on their thinking caps to do something about it.

We have blown past 38.09 trillion, and this is just the beginning.

The question readers need to ask themselves is can tech stocks go higher with the ultimate of headwinds driving a wedge into their business model?

The answer is complicated, and I will dive into it.

A knock-on effect is Treasury yields under pressure and the Federal Reserve concluding its balance sheet runoff, setting the stage for aggressive monetary easing.

The Fed is now lowering rates and giving up on the inflation that has been quite punitive, to say the least.

Well, that still doesn’t mean that tech stocks will go down.

Even in infamous Weimar Germany, hyperinflation, eroding purchasing power, and currency debasement experienced a vicious cycle where nominal asset prices soared while real wages stagnated.

Yet, in the short-to-medium term, this liquidity deluge favors risk assets. Low rates compress discount rates for future cash flows, supercharging growth stocks. Inflation, projected to rebound above 3% in 2026 due to tariffs and supply constraints, punishes fixed-income savers but rewards companies with pricing power, scalable margins, and hedges against rising costs.

The moral of the story is to OWN ASSETS, and tech stocks are high quality in this regard.

Tech, as the economy’s innovation engine, stands to accelerate most. Subsectors like AI, semiconductors, and cloud computing thrive on capital abundance, turning fiscal folly into fuel for exponential growth.

The rationale is straightforward. Federal debt buildup injects trillions into circulation via deficit spending—think infrastructure bills, subsidies, and stimulus that cascade into private investment.

Money printing lowers borrowing costs, enabling tech firms to fund R&D without dilution. Inflation, while corrosive broadly, acts as a tailwind for tech leaders who embed cost increases into SaaS pricing or hardware markups.

Fast-forward to 2025, and AI adoption will fortify balance sheets, recurring revenue, and exposure to transformative trends.

These aren’t speculative bets but compounding machines, blending defensive moats with offensive growth.

Broadcom (AVGO) follows as a semiconductor diversifier with enterprise heft. Unlike pure-play chipmakers, Broadcom’s custom ASICs and networking silicon serve AI plumbing—think VMware integrations and 5G backhaul.

Low rates favor Broadcom’s $10 billion buyback program, enhancing EPS amid money-printing dilution elsewhere.

For software resilience, Microsoft (MSFT) is indispensable. Azure’s cloud dominance captures 25% market share, with AI Copilot add-ons driving 30% subscription growth.

Palantir (PLTR) emerges as the dark horse for data analytics in a surveillance state. Government contracts, comprising 55% of revenue, align perfectly with debt buildup—think defense AI amid geopolitical strains.

Applied Materials (AMAT) anchors the supply chain. As a leader in chip fabrication equipment, it benefits from reshoring spurred by tariffs and subsidies.

Palo Alto Networks (PANW) fortifies cybersecurity, a non-discretionary spend in inflationary chaos.

Readers who want to boldly jump into the risk-on assets must look at these high-level tech companies that have a seat at the AI table.

The tech companies that haven’t been front and center of AI have been crushed in 2025 and will do even worse in 2026.

AI stocks will eventually comprise 70% of the entire stock market in just a handful of names.

Don’t try to get cute and gamble away your hard-earned money into a stock that has no way to participate in the AI future.