Early investments in AI have contributed to the outperformance of this global tech fund for a second consecutive year.

T. Rowe Price’s Global Technology Fund (PRGTX) has been outperforming the market due to its early bets on artificial intelligence (AI) and semiconductor stocks. The fund, managed by Dominic Rizzo, has jumped more than 26% in 2024 after a 56% surge in 2023. Rizzo attributes the success to a four-step investing framework that focuses on linchpin technologies, innovation in growth markets, improving fundamentals, and reasonable valuation. PRGTX’s early position in AI stocks like Nvidia has been key to its recent success, with Nvidia accounting for nearly 18% of the portfolio and shares up 166% since the start of 2024.

In addition to Nvidia, PRGTX has made significant bets on other semiconductor stocks like Taiwan Semiconductor Manufacturing, Advanced Micro Devices, ASML Holding, and Analog Devices. The fund also holds positions in tech giants Apple and Microsoft, with Apple’s growth in services business and smartphone upgrades in emerging markets seen as potential catalysts for the stock. Microsoft’s partnership with OpenAI and Azure cloud computing business are also highlighted by Rizzo as key factors contributing to its appeal. Rizzo expects these companies to benefit from the AI tailwinds and data needed for AI applications.

Rizzo’s investing style focuses on finding companies with strong fundamentals, reasonable valuations, and potential for growth in emerging markets. He believes that the right framework and investing style are crucial for success in the current market environment. The fund has a $2,500 minimum investment, charges a 0.94% net expense ratio, and is rated two stars by Morningstar. Despite the positive outlook, Morningstar notes that the fund still has much to prove after the revamp that brought Rizzo onboard in 2022. Overall, PRGTX’s early bets on AI and semiconductor stocks have propelled its performance, leading to its outperformance in the market for the second consecutive year.

In conclusion, T. Rowe Price’s Global Technology Fund has seen success in recent years due to its early investment in AI and semiconductor stocks. The fund’s four-step investing framework, managed by Dominic Rizzo, focuses on linchpin technologies, innovation in growth markets, improving fundamentals, and reasonable valuation. Early positions in AI stocks like Nvidia, as well as other semiconductor companies and tech giants like Apple and Microsoft, have contributed to the fund’s strong performance. Rizzo’s focus on companies with strong fundamentals and growth potential in emerging markets, as well as the right investing style, has been instrumental in navigating the market environment. While the fund has shown promise, it still has much to prove according to Morningstar. Overall, T. Rowe Price’s Global Technology Fund’s early bets on AI and semiconductor stocks have positioned it well for continued success in the ever-evolving tech landscape.