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Billionaire “bond king” Bill Gross has asked investors to avoid tech stocks and stick to value stocks.
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Microsoft is the only choice if investors need to get into the technology sector, he said.
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Gross also questioned the rationale for holding bonds. Yields rose on Thursday following the release of the GDP report.
Bill Gross says investors should avoid tech stocks.
In an article onthe “bond king” said: “Stick to value stocks, avoid tech for now.”
His message comes as a weaker-than-expected GDP report also showed consumer prices remained high in the first quarter. Bond yields jumped on the data and the technology sector fell, with the Nasdaq Composite down more than 1% Thursday afternoon.
Gross said if investors must go into technology, go for Microsoft: “MSFT, the best in technology if need be.”
Expectations for the tech titan’s earnings after the bell on Thursday are high as Wall Street eyes momentum in its Azure, Copilot and Office 365 units.
Gross also questioned bond ownership, with the 10-year yield above 4.7% on Thursday after the GDP report was released.
The billionaire investor said he owns shares in Western Midstream Partners and energy infrastructure company MPLX.
Bill Gross appeared calm in the face of the AI craze that has gripped Wall Street. He previously told investors that the AI frenzy showed signs of “excessive exuberance“.
The stock market experienced its worst month of the year in April. A further rise in inflation in March prompted a reassessment of the Federal Reserve’s monetary policy, with Wall Street reducing its expectations for rate cuts.
Profits from the technology sector were not enough to spark a new recovery. Tesla reported dismal results, but the stock rose thanks to plans underway to develop a cheaper vehicle model.
Meta, however, disappointed investors with weak guidance in its earnings report on Wednesday. The stock sold off sharply, down more than 10% Thursday evening, helping to drag the technology sector down.
Read the original article on Business Insider
