Fund managers are finding stunning returns at the smaller end of the Australian sharemarket as the global artificial intelligence trade roars back to life from Facebook owner Meta’s AI agent showing early signs of success, boosting optimism about the demand for computing chips.
The Philadelphia Stock Exchange Semiconductor Index, which tracks the world’s largest chip companies, jumped 4.3 per cent on Monday (Tuesday AEST), its best day in seven weeks, and another 2.1 per cent the next session.
The index has gained 78 per cent this year, led by memory chipmaker Micron, which has surged nearly 250 per cent year-to-date.
But the Australian sharemarket has largely missed out on this boom because of its low exposure to the technology sector, which makes up just 1 per cent of the ASX 200’s profits, compared with the nearly 70 per cent made up of financials and materials.
This means the ASX 200 has underperformed Wall Street and other more tech-heavy markets, including South Korea and Japan.