Luxury and technology are pushing up stock market indices. Thus, since January 1, 2023, the shares of the Hermès and L’Oréal groups have increased significantly, by around 30% and 20%. Better still, those of the Internet and graphics card giants Meta Platforms (ex-Facebook) and Nvidia have jumped by almost 150% and 210%! “Luxury benefits from a favorable a priori, because this sector is capable of showing good results even in periods of high inflation, observes Guillaume Eyssette, associate director of the wealth management firm Gefinéo. The strength of the brand allows both to retain wealthy customers who are not very sensitive to price increases and to pass on cost increases fairly easily.” For the Big Tech American, success is undoubtedly linked to a catch-up effect, as this area of activity underperformed in 2022. “In addition, artificial intelligence [IA] arouses real enthusiasm, because this technology could revolutionize our society”, underlines Guillaume Eyssette.
As there is not yet a major specialized player in this field, investors are setting their sights on groups with skills in technologies that will promote their development. This is particularly the case of Meta Platforms and Alphabet, the parent company of Google, which have an immense reservoir of data capable of feeding the algorithms on which AI feeds. Microsoft is a major shareholder of OpenAI, the creator of ChatGPT. An investment which should allow it, among other things, to integrate the advances of this prototype into its Bing search engine. As No. 1 in high-performance graphics cards, Nvidia, for its part, develops components that promote AI processing of massive volumes of data.
Is there still time for an investor to jump on the bandwagon? Yes, according to Bastien Guillaud, manager at Matignon Finances: “Large luxury groups and tech stocks have become expensive, but we can see disparities in valuation depending on the company. So it may prove interesting to invest in most affordable companies, like LVMH or Alphabet.”
Thales, Airbus, BNP…
To venture into other sectors, it is better to favor companies with reasonable prices – or which have undergone a downward correction – while offering medium and long-term growth prospects. “The desire of NATO members to increase their military spending favors certain industrial equipment manufacturers like Thales or Airbus,” notes Olivier Cornuot, director of collective management at Matignon Finances. The theme of energy transition (wind, solar, hydrogen) , with stocks like Solaria and Plug Power in hydrogen, could come back into focus in the event of a cold winter and rising oil prices. As for European banks (Société Générale, BNP Paribas), they have solid balance sheets for attractive valuations and benefit from the current rise in interest rates.” So many sectors that perform well in the long term.