The battle between technology companies and “Main Street” keeps heating up – not just in the real world, but in the stock market. How it unfolds could mean a lot for your portfolio in the coming year.
Business Insider ran a story called “America’s Hottest NIMBY Issue: Data Centers” in February – and the debate has only gotten louder since then. Big Tech wants to build behemoth data centers all over the country to power the AI boom...but consumers are worried about everything from environmental impacts to electricity costs.
I got to thinking about that when I looked at the increasing bifurcation in performance between big tech STOCKS and Main Street ones. My MoneyShow Chart of the Day shows the 1-year performance for a range of ETFs, including the iShares Semiconductor ETF (SOXX) at one end of the spectrum and the State Street SPDR S&P Homebuilders ETF (XHB) at the other.
SOXX, AIQ, XRT, XHB, SPY (1-Year % Change)
Data by YCharts
The SOXX is up 160.7%. The Global X Artificial Intelligence & Technology ETF (AIQ) is up 58.64%. Meanwhile, the State Street SPDR S&P Retail ETF (XRT) is up just 21.3% and the XHB is up only 8.7%. That gap is wider than the Grand Canyon (where I have it on good authority there are no data centers being built…yet).
Blame a lackluster housing market. Blame an okay, but not great, job market. Or blame the fact higher gas costs mean “consumers are running out of money” at the end of the month, in the words of one CEO quoted by Bloomberg.
But if we’re going to have an all-oars-rowing-together market rally, we’re going to need consumer names to get on board before long.
