In the Fund Check series, fund managers of selected funds look back on developments over the past year and give their assessment of what we can expect in 2026. (Note: Prognoses are not a reliable indicator of future performance. Please note that investing in securities involves risks as well as opportunities.)

Summary

  • Artificial intelligence (AI) has remained a key focus in recent months. However, increased uncertainty in recent weeks has led to some “AI winners” being penalised by the markets.
  • In addition to AI, there are other topics that have been highly relevant for the technology sector. Demand for smartphones and PCs has stabilised again. Cybersecurity and infrastructure software companies have been in demand.
  • As we expect demand for AI computing (AI chips, data centre networking) to remain strong, we are positioned accordingly in companies such as Broadcom, Alphabet, Nvidia, TSMC, and Nova Limited.
  • Our 2026 outlook for equities in the technology sector remains positive, with fundamental demand in place and earnings growth remaining dynamic.

Please note: The companies listed have been selected as examples and do not constitute investment recommendations. There is no guarantee that the securities will remain in the portfolio permanently.

Fund manager Bernhard Ruttenstorfer
(c) Stephan Huger

Fund & Performance

The ERSTE STOCK TECHNO mainly invests in companies from developed technology markets. The fund's investment process is based on fundamental business analysis. The majority of companies in this area can be found in the United States. As a result, Pacific and European equities tend to play a subordinated role in the fund. When selecting stocks, the focus is on high-quality, high-growth companies. cological and social factors as well as corporate management factors are integrated into the investment process.

Note: Please note that an investment in securities entails risks in addition to the opportunities described. Past performance is not a reliable indicator of future performance.

The performance is calculated in accordance with the OeKB method. The management fee as well as any performance-related remuneration is already included. The issue premium which might be applicable on purchase and as well as any individual transaction specific costs or ongoing costs that reduce earnings (e.g. account- and deposit fees) have not been taken into account in this presentation.

Commentary by fund manager Bernhard Ruttenstorfer

Review

In recent months, artificial intelligence (AI) has remained a key focus – not only in the technology sector, but also in other sectors such as utilities and industrials. The news flow remained predominantly positive. Increases in planned and actual capital expenditure led to significant growth in order books. In extreme cases, such as Oracle, the order book has increased almost fivefold to just under USD 500bn within a year. On the other hand, it was precisely these developments that led some investors to ask critical questions: How dependent is Oracle on a few customers (including OpenAI)? Will the computing capacity actually be utilised? How high are Oracle's profit margins? How will the expansion be financed? These were among the issues that marked the preliminary peak in several indices at the beginning of November. As a result, some “AI winners” have been punished by the markets in recent weeks.

Please note: Investing in securities involves risks as well as opportunities.

Alphabet and its subsidiary Google have also made significant progress in the AI race. Not only has the company been very successful in acquiring new customers for its cloud-based AI services, but it has also made major technical advances in self-developed AI computer chips and AI models. It is not without reason that Alphabet's direct competitors (OpenAI, probably Meta and others) are also renting Google's infrastructure.

In addition to AI, there are other topics that were highly relevant to the technology sector. Demand for smartphones and PCs stabilised again. Improvements were also visible in the end markets for analogue chips. Although demand from automotive and industrial equipment manufacturers remained subdued, inventories have largely normalised in recent quarters. This applies not only at the customer level, but also at the level of intermediaries and chip manufacturers. As a result, companies with computer chips such as sensors, microcontrollers and power chips are well positioned for a possible upturn in demand. A renewed increase in demand for electric cars would also have a positive effect.

That being said, demand for software companies on the equity market remained mixed. Cybersecurity and infrastructure software companies performed well. These companies can directly leverage the advantages of AI and are also indispensable for implementing AI solutions in businesses.

As we expect demand for AI computing (AI chips, data centre networking) to remain strong, we are positioned accordingly in companies such as Broadcom, Alphabet, Nvidia, TSMC, and Nova Limited. However, we are also keeping an eye on the strong development of AI in China. From a technological perspective, China poses a serious threat to the USA’s dominance in AI. To participate in this, we have invested in companies such as Baidu and Zhongji Innolight. We are also keen on shares that we classify as belonging to the internet industry, including Amazon, Reddit, and Zillow. In our opinion, cybersecurity companies (Palo Alto, Crowdstrike) are also well positioned.

 

Outlook

Our outlook for technology shares in 2026 remains positive. There is fundamental demand, usage exceeds available computing power, and this trend is likely to continue over the next few quarters.

Earnings growth is expected to remain dynamic. The market consensus expects earnings per share to increase by over 15% in 2026, which justifies ambitious market valuations. We also expect geopolitical tensions to ease further, as recent developments between the USA and China indicate. Negative tariff effects will diminish in the coming quarters, and the US Federal Reserve still has room to cut key-lending rates. In summary, we therefore see not only positive fundamentals but also supportive market sentiment.

Note: Please note that investments in securities may be subject to market fluctuations.

Disclaimer of the management company Erste Asset Management GmbH and its sales agent Erste Bank Group

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website www.erste-am.com under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the fund prospectus or the Information for Investors pursuant to Art 21 AIFMG and the key information document are available, and any other locations where the documents can be obtained are indicated on the website www.erste-am.com. A summary of the investor rights is available in German and English on the website www.erste-am.com/investor-rights and can also be obtained from the Management Company.

The Management Company can decide to suspend the provisions it has taken for the sale of unit certificates in other countries in accordance with the regulatory requirements.

Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at www.erste-am.com.

Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance. Past performance is not a reliable indicator of the future performance of a fund.

Please note: Investments in securities entail risks in addition to the opportunities presented here. The value of units and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your units. Persons who are interested in purchasing units in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision. If the fund currency is different than the investor’s home currency, changes in the relevant exchange rate can positively or negatively influence the value of the investment and the amount of the costs associated with the fund in the home currency.

We are not permitted to directly or indirectly offer, sell, transfer, or deliver this financial product to natural or legal persons whose place of residence or domicile is located in a country where this is legally prohibited. In this case, we may not provide any product information, either.

Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of the fund to American or Russian citizens.

It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice.

This document does not represent a sales activity of the Management Company and therefore may not be construed as an offer for the purchase or sale of financial or investment instruments.

Erste Asset Management GmbH is affiliated with the Erste Bank and austrian Sparkassen banks.

Please also read the “Information about us and our securities services” published by your bank.