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As the Iran war and spiking oil prices push energy stocks to market-beating performance, one investment chief is opting to focus on an old favorite.
David Bianco, Americas CIO at DWS Asset Management, which oversees over $1 trillion in assets, says the best strategy right now is to focus on Big Tech — the formerly dominant sector that’s had a rough start to 2026.
One reason the group is appealing is because it’s relatively shielded from Iran-war macro fallout, Bianco told Business Insider, also noting that capex spending on AI hasn’t been impacted.
“Even if the economy is very slow, this investment spending on the data centers is going to continue, and these tech companies are committed to developing their AI-oriented businesses,” Bianco said.
Combined with attractive valuations after some weakness, tech stocks are suddenly appealing, he said, citing Nvidia and Microsoft as examples of high-growth tech stocks trading at a notable discount relative to the S&P 500.
“I think it’s time to get back to tech stocks and appreciate the secular strength of their earnings,” he said.
Bianco is far less keen on energy stocks, even as crude oil prices stay elevated. He just doesn’t see it as a long-term play.
“I’m underweight energy,” he noted. “Sure, it’s attractive over the short term and may go higher over the short term, but unless you believe this crisis is going to last for a very long period, I have a tough time chasing energy stocks.”
He added that he’s increased his underweight in transportation and consumer discretionary stocks, as well as housing and automotive-related and early cycle industrials — all areas that are typically rate-sensitive and cyclical.
Bianco has a dim economic view because of the inflationary impact of the war, and spending deficits he expects to remain elevated. Meanwhile, interest rate cuts don’t seem likely.
He sees the 10-year yield staying well above 4%, compelling him to believe that industries such as housing and automotive aren’t going to recover in the near future.
“Whether it be stimulus, One Big Beautiful Bill or interest rate cuts, this idea that by the Spring, housing and auto and the broader consumer and broader manufacturing investment spending would improve, I think that’s been put on a longer hold,” he said.
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