It’s going to take more than just a drop in Treasury yields to revive moribund technology stocks, as growth worries grip an industry slashing costs.

That’s the view of Stuart Kaiser, head of US equity trading strategy at Citigroup Global Markets.


Technology shares have been battered this year as the Federal Reserve aggressively hikes interest rates to combat inflation, but the sector rebounded last week after a softer-than-expected inflation print improved prospects of a dovish tilt by the central bank. The tech-heavy Nasdaq 100 Index notched its best week in two years.

That’s not enough, though, to convince Kaiser of the return of big tech. “I don’t think I’m behind that fully yet,” he said.

Large technology companies from Inc. and Meta Platforms Inc. have recently announced hiring freezes or layoffs, raising questions about their growth prospects.

“The question here for tech is -- if I take that pressure off from rates, do I get a valuation rerating, or do people take a step back and say I need to see how this cost-cutting initiative plays out?” Kaiser said. “Tech is a really tricky trade right here, just for that reason.”