Introduction

CIMB Securities Sdn. has upgraded Malaysia’s technology shares to overweight from neutral. This decision is driven by improving earnings visibility, largely due to the growing demand for artificial intelligence (AI).

New Upcycle in the Tech Sector

According to CIMB analyst Mohd Shanaz Noor Azam, the sector “has entered a new upcycle with a potential for valuation re-rating.” This suggests that the tech sector is poised for significant growth and increased valuations.

Stronger Utilization Expected

Azam also mentioned, “We expect to see a stronger utilization pick-up, especially from the second half of 2024 onwards.” This indicates that the demand for tech products and services is expected to rise, leading to better utilization of resources.

Conclusion

In summary, CIMB’s upgrade of Malaysian tech stocks is based on the promising outlook for AI-driven growth and better resource utilization. For more details, you can read the full article on Bloomberg.

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