Strong long-term investment opportunities continue to exist within the technology sector because of artificial intelligence (AI) developments, together with increasing cloud computing demand and recovering semiconductor markets. The tech sector shows strong indications of long-term performance because AI interest remains high, cloud revenues continue to grow and worldwide semiconductor sales increase.
AI advancements are transforming business operations while delivering better performance and increased productivity across various sectors. Goldman Sachs projects cloud computing revenues to reach $2 trillion by 2030 through AI integration and rising enterprise adoption. The AI market size is expected to reach $826.7 billion by 2030 from $243.7 billion in 2025, showing a 27.67% annual growth rate, thus supporting the sector’s long-term growth potential.
The semiconductor industry benefits from a strong comeback because data centers, together with automotive systems and consumer electronic products, drive up demand. The Semiconductor Industry Association reported that global semiconductor sales increased by 19.1% in 2024 and predicts double-digit growth throughout 2025.
Inflation may have risen, but the Fed has kept interest rates unchanged in its latest policy meeting and hasn’t shown any intent to hike rates soon. This bodes well for tech stocks since rate increases impact future cash flows and raise the cost of borrowings.
Given the favorable long-term outlook for the tech sector, investing in tech mutual funds such as Fidelity Select Semiconductors Portfolio FSELX, DWS Science and Technology Fund KTCAX and T. Rowe Price Science and Technology Fund PRSCX seems judicious.
These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
Fidelity Select Semiconductors Portfolio fund invests in companies engaged in the design, manufacture, or sale of semiconductors and semiconductor equipment. FSELX uses fundamental analysis like financial condition, industry position and market conditions to select investments.
Adam Benjamin has been the lead manager of FSELX since March 16, 2020. Most of the fund’s holdings were in companies like NVIDIA Corp. (24.8%), Broadcom Inc. (6.5%) and ON Semiconductor Corp (6.4%) as of Nov. 30, 2024.