Last night, the S&P 500 Index (SP: .INX) soared to another all-time high.
The index, which tracks the 500 largest companies in America, reached 6,698.88 in intraday trading before closing at 6,693.75 points.
The S&P 500 has now risen 14% for the year to date.
Nvidia Corp (NASDAQ: NVDA), which makes up around 8% of the index, rose nearly 4% on news that the chipmaker would be investing up to US$100 billion in OpenAI to support new data centres and other artificial intelligence infrastructure.
Nvidia closed at $183.61, just short of its new all-time high of $184.55 reached in intraday trading.
Since April, US technology stocks have rallied strongly. Investors may be wondering if they've missed the boat or if further upside lies ahead.
Bank of America remains bullish on US tech
Despite rebounding sharply since the "Liberation Day' dip, Bank of America (NYSE: BAC) strategists believe US technology stocks can reach higher levels.
As recently reported in the Australian Financial Review, Bank of America believes investors should position for further gains in the US tech space.
According to the AFR:
Strategist Michael Hartnett pointed to 10 equity bubbles since the start of the previous century, finding that these periods of extreme overvaluation produced average trough-to-peak gains of 244 per cent. That suggests that, after rising 223 per cent from their March 2023 low, the magnificent seven cohort has "more to go".
Goldman Sachs Strategist David Kostin also recently revised his projections for the S&P 500, rolling forward three, six, and twelve-month S&P 500 return forecasts to 2%, 5%, and 8%, respectively.
How ASX investors can benefit
ASX investors looking to capitalise on his trajectory can buy individual US shares or ASX exchange-traded funds (ETFs).
The most well known ASX ETFs, Vanguard US Total Market Shares Index AUD ETF (ASX: VTS) and iShares S&P 500 AUD ETF (ASX: IVV) contain diversified exposure to US companies. VTS ETF contains more than 4,000 companies, while IVV ETF holds 500.
While this appears to be extremely diversified, given the number of companies held in the ETFs, there is still a relatively high exposure to US tech, given their record level of concentration. In particular, the 'Magnificent 7' makes up around 40% of the IVV ETF.
Investors after even more concentrated exposure to the megacap tech stocks could consider the Global X Fang+ ETF (ASX: FANG), which contains just 10 equally weighted holdings. It holds all Magnificent 7 companies except Tesla Inc (NASDAQ: TSLA). This allows ASX investors to own the majority of Magnificent 7 companies in a single trade.
Should US tech rally further, any one of these ASX ETFs is likely to rise with it.
