Company Interview / Tech pressures won't stop James from finding stock opportunities

Key Points:

Technology stocks under pressure amid AI-driven sector concerns and weaker global peersPinnacle Investment Management (ASX:PNI) posts resilient base fee growth despite lower performance feesMarket rotation towards cyclical and economically sensitive stocks favouredGold outlook subdued; copper and base metals preferred for medium-term growth

James Gerrish from Market Matters notes a challenging period for technology stocks on the ASX, reflecting broader concerns following significant declines in US software companies like Salesforce (NYSE: CRM) and Intuit (NASDAQ: INTU). Gerrish highlights growing uncertainty created by the rapid advancement of AI, particularly how lower barriers to entry are pressuring traditional software models. Local stocks such as Xero (ASX:XRO) have shown notable weakness, aligning with the global tech sector’s headwinds.

Gerrish provides an update on Pinnacle Investment Management (ASX:PNI) after its half-year numbers. While headline earnings appear down year-on-year due to lower performance fees, underlying base fee growth remains strong. Gerrish sees Pinnacle’s diversified business model and multiple fund managers as positive for resilient earnings, despite cyclicality in performance fees. He expects the stock to perform reasonably well in the current environment.

Turning to broader market strategy, Gerrish believes earnings season could reinforce a trend away from high-growth technology stocks and toward more economically sensitive, cyclical sectors. He describes a rotation as resources rebound and investors focus on companies better positioned for stronger economic growth. In commodities, Gerrish expresses caution on gold, suggesting recent price action is momentum-driven, while remaining constructive on copper and other base metals with medium-term demand tailwinds.