The technology sector started the year with a touch of turbulence. Globally, tech is in negative territory so far, while the broader market is showing gains. Considering that technology represents nearly a quarter of global equity market capitalisation, it becomes clear how sensitive the market is to any shock within the sector. This is particularly visible in the United States, where tech stocks account for more than 40% of the S&P 500 index, meaning any sector movement immediately ripples through the entire benchmark.
In Europe, by contrast, the numbers are in positive territory — although this picture is largely shaped by a single heavyweight: ASML, which makes up almost half of the European tech index. It is as if one striker determines the outcome of the entire league.
"},"alignedImage":{"position":"bottom"}},{"componentType":"sectionTitle","title":"Tech earnings remain solid"},{"componentType":"paragraph","richBody":{"value":"Despite the recent weakness, there is no indication that the sector’s foundations are crumbling. Corporate earnings remain robust — often even stronger than those of the broader market. Valuations, dismissed as “expensive” only last year, have now reverted to their historical averages. And the outlook remains impressive: analysts are forecasting earnings growth of more than 35% for the sector this year. If a bubble exists at all, it is behaving in a remarkably rational way.
The anxiety among investors is concentrated in one area: software. This subsector is down nearly 15% this year. Software accounts for a quarter of the global technology sector and as much as a third in the US. The question doing the rounds is whether AI agents could render traditional software obsolete. It sounds like a looming threat, but history shows that predictions about “the end of X because of technology Y” rarely come true.
"}},{"componentType":"sectionTitle","title":"Big tech has deep pockets"},{"componentType":"paragraph","richBody":{"value":"When ChatGPT was launched, the classical search‑engine model was widely declared to be on its last legs. Yet Google swiftly integrated Gemini across its products and simply maintained its dominant position. And the narrative that DeepSeek would upend NVIDIA’s market power turned out to be little more than noise.
Large technology companies have deep pockets, vast development teams, and every incentive to absorb or neutralise emerging threats at speed. Not every company will win the race, but as a whole, the sector has an extraordinary capacity to adapt — the very trait that has driven its growth.
"}},{"componentType":"sectionTitle","title":"Tech remains an essential pillar in any portfolio"},{"componentType":"paragraph","richBody":{"value":"What is far more tangible at present are physical constraints. Demand for computing power is exploding. RAM production is struggling to keep pace, with prices having increased fivefold in just six months. Data centres are nearing maximum capacity, while electricity grids are struggling with the sharp rise in power consumption. In the United States, data centres now consume as much electricity as the entire nation of Thailand. That is not sentiment — that is physics.
For investors, this is not a reason to flee the tech sector, but rather an invitation to look more broadly. Technology remains an essential pillar in any portfolio, if only because of its index weight and superior earnings growth. But the AI revolution extends well beyond software and semiconductors: pharmaceuticals, energy companies and infrastructure players also stand to benefit from the digital acceleration.
This is not a “softwaremageddon”. It is a sector that continues to grow, stretch, creak and strain — just as it always has. That noise can make it challenging to stay invested at times, but even here, the long‑standing rule holds: staying the course pays off.
"}},{"componentType":"linkList","iconTitle":{"title":"Read More"},"textLinks":[{"url":"/en/personal/investing/market-news-and-views/bobs-vision-overview-page","text":"Bob's Vision Overview"},{"url":"/en/personal/investing/market-news-and-views","text":"Moren News and Views"}]},{"componentType":"sectionTitle","title":"Good to Know"},{"componentType":"paragraph","richBody":{"value":"Investing involves risks and costs. The value of your investment may fluctuate. Past performance is no guarantee of future results. Read more about the risks of investing.
This publication has been prepared on behalf of ING Bank N.V. and is intended for information purposes only. ING Bank N.V. obtains its information from sources deemed reliable and has taken the utmost care to ensure that the information on which it based its views in this publication was not incorrect or misleading at the time of publication. ING Bank N.V. does not guarantee that the information it uses is accurate or complete. The information contained in this publication may be changed without any form of announcement. Copyright and data file protection rights apply to this publication. Data from this publication may be reproduced provided that the source is stated. ING Bank N.V. has its registered office in Amsterdam, commercial register no. 33031431, and is regulated by the Dutch central bank De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM). ING Bank N.V. is part of ING Groep N.V.
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