Why Tech Stocks Still Hold the Future: Robert Smith’s Bold Vision in 2025’s Volatile Markets
18min read The tech sector has never been more polarizing. As trade wars rage, geopolitical tensions simmer, and markets oscillate between euphoria and panic, one figure remains defiantly bullish: Robert F. Smith, founder of Vista Equity Partners. At the 2025 Milken Institute Global Conference, Smith laid out a compelling case for tech stocks, arguing that their long-term potential—driven by artificial intelligence (AI)—outweighs near-term turbulence. His message? Tech is not just a sector to endure—it’s the arena where the next generation of winners will be forged.
The AI Imperative in Tech Valuations
Smith’s optimism hinges on AI’s transformative power. “Not all [tech companies] will become a ‘gen-AI,’” he cautioned, emphasizing that only firms with dominion over workflows and data sets will survive. This isn’t just theoretical: a 2024 IDC InfoBrief commissioned by Vista found that AI-driven automation and low-code solutions are already boosting software development productivity by 30–50%, with quality improvements at every stage.
For investors, this means prioritizing companies that embed AI into their core operations. Meta’s (META) recent AI-driven ad platform upgrades or Microsoft’s (MSFT) Azure AI tools exemplify this shift. Smith’s own portfolio leans into enterprise software firms—like those in Vista’s portfolio—that prioritize data sovereignty, a critical edge in an era of escalating regulatory scrutiny.
Market Performance: Gains Amid Turbulence
The numbers back Smith’s stance, though they’re far from rosy. The Nasdaq Composite (^IXIC) surged 8.6% in March 2025, fueled by Q1 earnings from giants like Alphabet (GOOGL) and Microsoft. Yet the index still fell 7% year-to-date—a stark contrast to the S&P 500’s 3% decline.
This dichotomy reflects a market in flux. While AI leaders thrive, laggards falter. Apple’s (AAPL) $900 million tariff bill—a direct hit from Trump-era trade policies—highlights the risks of operating in a fragmented global economy. Smith’s solution? Focus on fundamentals, not macro noise.
Navigating the Storm: Trade Wars and Selectivity
Smith’s bullishness isn’t blind. He acknowledges headwinds: tariff-driven cost pressures, geopolitical uncertainty, and a stalled IPO market. The last major tech IPO, CoreWeave (CRWV), debuted in March, and EY reports a 20% drop in global tech IPO volumes in Q1 2025.
Yet Smith sees this as a filter, not a crisis. “Some companies won’t have a right to exist,” he says, arguing that the shakeout rewards investors who pick firms with proven AI execution. Vista’s strategy—backed by a 20-year track record—prioritizes companies that turn data into actionable insights, like healthcare software firm Cerner, which Vista acquired in 2020 and repositioned as a leader in AI-driven patient analytics.
The IPO Drought and Long-Term Focus
The IPO slump underscores a broader theme: tech’s growth is now concentrated in established players. Startups, Smith argues, must now demonstrate AI scalability upfront—a bar many fail to meet. This aligns with Thrivent’s Q2 outlook, which warns that “valuation discipline” will separate winners from losers.
Smith’s vision extends beyond profit. He ties tech’s potential to societal impact, echoing his philanthropy—most notably, his $57 million pledge to eliminate student debt for Morehouse College graduates. “Quality at scale,” he insists, isn’t just about software—it’s about using technology to democratize opportunity.
Conclusion: Tech’s Future is in the Hands of the Bold
Robert Smith’s thesis boils down to this: AI is the great equalizer. Companies that harness it will dominate; those that don’t will fade. The data supports this: Nasdaq’s 8.6% monthly surge in Q1 2025 outpaced the Dow and S&P, proving tech’s resilience. Even with its 7% YTD decline, the index remains a magnet for long-term capital.
For investors, the path is clear: Go narrow, go deep. Back firms with AI at their core, like Microsoft (up 12% in 2025 despite broader tech volatility) or NVIDIA (not mentioned in the research but a clear AI leader). Avoid those clinging to outdated models—like legacy software companies without data strategies.
Smith’s final warning? “Not all will survive.” In 2025’s tech market, that’s both a challenge and an invitation. The future belongs to those who code it—and invest in it—with vision.
