Despite the continuous strong increase, technology stocks are still forecast to have room for growth thanks to the wave of investment in artificial intelligence (AI) and led by many other technology stocks in the world.
Last week, VN-Index closed at 1,282 points, up slightly by 0.16% compared to the previous week; liquidity decreased and foreign investors maintained strong net selling momentum. The market struggled with many groups of stocks falling, but technology stocks continued to be a bright spot.
Keep making your mark
Since the beginning of the year, technology stocks, especially the "FPT family" and "Viettel family", have made their mark on the stock market by racing to surpass the peak.
In particular, FPT shares of FPT Corporation have attracted attention when they have continuously reached new peaks in the past 5 months, currently at 136,100 VND - an increase of 64% compared to the beginning of the year. FOX shares of FPT Telecommunications Corporation have also doubled in price since mid-April 2024, from 55,000 VND to 110,300 VND. This is the highest level ever for these two stocks. Another stock belonging to the "FPT family", FOC of FPT Online Services Corporation, has also increased by nearly 35% in just over a month.
For the “Viettel family”, CTR shares of Viettel Construction Corporation have increased by nearly 80% since the beginning of the year, closing last week at a peak of 160,200 VND. Notably, VGI shares of Viettel International Investment Corporation increased 4 times in just the first half of the year, to 109,700 VND. Many other technology stocks such as VTP, VTK, MFS have also increased rapidly in a short period of time.
The “wave” of technology stocks has also spread to many other enterprises. CMG shares of CMC Technology Group increased by nearly 63% compared to the beginning of the year, reaching a peak of 70,600 VND. ELC shares of Elcom Technology - Telecommunications Company increased by nearly 40%, currently at 29,050 VND…
Mr. Vo Dai Phong, Head of Investment Consulting Department - Nhat Viet Securities Company, said that technology stocks are the focus of the world, the growth is partly led by the large technology corporation Nvidia. CMG and FPT stocks follow the general trend with expectations of digital transformation and artificial intelligence (AI). Domestically, technology is also of special interest to the Government when it sets the goal of Vietnam becoming an important digital center of the region.
“Considering the supply and demand factors in the market, technology stocks have accumulated with a long price base of about 2 years, so during the upward process, they did not face much selling pressure. This contributed to creating an impressive price increase period,” Mr. Phong commented.
Looking at the profit of listed companies, Mr. Nguyen Dai Hiep, Deputy Head of the Individual Customer Consulting Department - Analysis Center of Dragon Viet Securities Company (VDSC), said that FPT recorded improved business results in some key areas, such as software - thanks to the continued increase in demand for digital transformation; telecommunications - expanding to the Japanese, US and European markets.
Mr. Hiep analyzed: “FPT Telecom has invested heavily in expanding infrastructure and networks, helping the number of broadband internet subscribers increase sharply, and pay TV services grow positively. For Viettel International Investment Corporation, in the first quarter of 2024, the exchange rate difference profit contributed mainly to the growth of the telecommunications sector. This company also set a high profit plan with the growth of telecommunications subscribers and digital subscribers... The profit picture of technology group enterprises has positive developments”.
Not peaked yet?
According to a recent report by Agribank Securities Company (Agriseco) on growth sectors in the second quarter of 2024, information technology stocks are expected to maintain growth momentum thanks to the demand for spending on global and domestic digital transformation forecast to increase by over 15%. The development trend of AI, Bigdata, and Cloud continues to lead the market. Enterprises are expected to benefit in the production, processing, assembly, and testing stages if Vietnam attracts high-tech sectors such as chips, semiconductors, and renewable energy in the long term.
For the telecommunications industry, Agriseco forecasts continued profit growth thanks to the promotion of 5G development. 2024-2025 is expected to be the period of widespread deployment of 5G networks in provinces and cities. The government has promoted the policy of developing data centers, creating infrastructure for telecommunications activities. According to Gartner Research and Consulting Group, data center development helps promote 15% of annual revenue for the telecommunications sector.
Mr. Nguyen Khac Vuong, Head of Investment Consulting Department - VPS Securities Company, commented that the strong growth of technology stocks comes from the smart money flow of investors. They have sought out state-owned enterprises such as Viettel, MobiFone or enterprises with world-class quality and scale such as FPT when signing a hundred million USD contract with technology giant Nvidia...
“Technology stocks belonging to the “FPT family”, “Viettel family” or CMG are still having big waves, the cash flow trend is increasing… so there are no signs of reaching the peak yet. Technology groups, logistics groups (export, seaports, oil and gas…) will be the promising stock groups in the near future” – Mr. Vuong commented.
According to the reporter, many investors have expressed regret for the technology stocks group for “missing the wave” recently. However, when asked whether they would buy technology stocks at this time or not, they said they were worried about risks and were afraid of “catching the peak”.
“The market is accumulating after leaving the 1,300-point mark in early June. Stocks are strongly differentiated but do not create clear waves in each industry group. Some brokerage firms recommend buying technology stocks, but I see that they have increased too much so I am worried about short-term surfing risks. If you hold stocks for the long term, the current valuation level is no longer cheap,” Minh Nam (living in District 7, Ho Chi Minh City), a long-time stock investor, argued.
Meanwhile, Mr. Nguyen Dai Hiep sees a lot of positive information from the macro environment helping technology stocks to jump. However, in the short term, the excitement of the market is pushing the valuation of stocks in this industry to quite high levels. For example, software industry stocks (FPT) are trading at over 28 times and telecommunications stocks (ELC, FOX...) are valued at over 21 times.
