Rudi: Where can you find shelter as winter arrives for tech stocks?

This interview was recorded on 4th February, 2026

Investor sentiment turns faster than most investors expect. Not long ago, software and technology stocks sat at the centre of the market, rewarded with premium valuations and plenty of goodwill. If you did not have a SaaS model, you were often ignored.

That mood has shifted decisively. Technology stocks have sold off hard, but more importantly, patience has evaporated. Results matter less than they used to and investors are no longer looking for reasons to stay invested.

Winter has arrived for technology stocks.

That is the assessment of FN Arena editor and veteran market analyst Rudi Filapek-Vandyck, who says the market has entered a phase where sentiment, not spreadsheets, is driving outcomes.

Rudi is careful to avoid simplistic definitions of market cycles. In a bull market, investors look for reasons to buy. In a bear market, investors look for reasons to sell. Increasingly, those cycles are not playing out across the whole market at once. Instead, they roll through individual sectors, often independently of what the index is doing.

That framework helps explain the current disconnect. The broader Australian market has held up reasonably well into 2026, supported by strength in energy, materials and parts of the financial sector. Beneath the surface, however, technology, quality growth and anything trading on elevated multiples have been under sustained pressure since mid last year. 

The chart below shows how quickly sentiment has changed for stocks that have, until recently, been leading the charge.

One statistic neatly captures how polarised conditions have become. FN Arena data shows roughly two-thirds of broker ratings are currently Buys. That is unusually high by historical standards. Some of those Buy ratings reflect genuine earnings momentum, particularly in resources. Others reflect disbelief at how far certain share prices have fallen.

“You can make the argument that resources and banks are now in a bull market,” Rudi says. “And you can make the argument that large parts of what used to be in a bull market are now in a nasty, prolonged bear market.”

Earnings will not save you if you are in the wrong sector

February is traditionally framed as earnings season. Companies report, expectations are reset and share prices respond accordingly.

This time around, Rudi suspects results will matter less than usual.

“If you’re in the wrong sector, earnings won’t save you,” he says.

The reason is simple. Momentum and sentiment are doing the heavy lifting. If a stock is caught in the wrong thematic bucket, even strong execution may not be enough.

He points to recent updates from Xero (ASX:XRO) as a clear example. The company delivered encouraging news, including pulling forward its US break-even timeline. In a different market environment, that sort of update could have driven a sharp re-rating. Instead, the share price struggled to hold any gains.

The same dynamic played out offshore. Microsoft (NYSE:MSFT) missed consensus expectations by just 1%, largely due to internal capital allocation decisions linked to Copilot development. The market response was swift and unforgiving, with the stock sold down aggressively.

The message is uncomfortable but clear. In this phase of the cycle, detail matters less than direction. If investors are in selling mode, they do not need much encouragement.

This also explains why parts of the resources complex are largely immune to reporting season noise. Rudi highlights contractors such as NRW Holdings (ASX:NWH), which continue to benefit from strong project pipelines and new contract wins. In these cases, the cycle itself is doing the work and valuations are often secondary.

Healthcare is no longer a shelter

Healthcare is another area where investor assumptions have shifted. Once considered a defensive, almost fail-safe sector, it has struggled to regain favour.

CSL Limited (ASX:CSL) will again be under the spotlight. The key question is whether simply meeting expectations will be enough. For some investors, it will not and Rudi argues that ResMed (ASX:RMD) offers a useful case study.

“They beat expectations, analysts lifted forecasts and the share price still went down,” Rudi notes.

Rudi also remains cautious on names such as Healius (ASX:HCW), which continues to face structural and operational challenges. In this environment, being labelled defensive is no longer sufficient.

Selective opportunities still exist

Despite the caution, Rudi is not suggesting investors retreat entirely. Instead, selectivity matters more than ever.

In the consumer space, Flight Centre (ASX:FLT) is one company frequently flagged by brokers as a potential positive surprise this reporting season. A softer Australian dollar provides a tailwind and expectations remain measured.

Among smaller names, GemLife (ASX:GLF) has attracted positive commentary despite its relatively short listing history. In telecommunications, Superloop (ASX:SLC) and Aussie Broadband (ASX:ABB) continue to be monitored closely, though Rudi acknowledges the technology label itself remains a headwind for now.

By contrast, stocks such as Temple and Webster (ASX:TPW), Aurizon (ASX:AZJ) and Bapcor (ASX:BAP) sit firmly in the laggard category. While valuations may look more reasonable, Rudi is not yet convinced sentiment has turned decisively in their favour.

Capital markets quietly improving

One area where Rudi sees a more constructive setup is capital markets. Macquarie Group (ASX:MQG) has endured several years of largely sideways performance. That may be starting to change.

With IPO activity slowly returning and capital raisings picking up, Macquarie stands to benefit. The group is also using technology to steadily take market share in Australia, a factor that often goes underappreciated.

Goodman Group (ASX:GMG) is another name on his radar. If Australia is to develop a meaningful AI infrastructure trade, Goodman is likely to play a central role. Sentiment remains weak, but that is often the case before longer-term opportunities emerge.

Rudi also references Qoria (ASX:QOR) as an example of a stock that has shifted from growth darling to value candidate, a familiar transition during bear markets.

Bellwether stocks to watch

When it comes to broader signals, Wesfarmers (ASX:WES) looms large as a read on consumer spending. Woolworths (ASX:WOW) occupies a similar role, with investors watching closely for signs that execution is finally stabilising.

The same logic applies to platform businesses such as CAR Group (ASX:CAR) and REA Group (ASX:REA). Both remain high-quality franchises, but both are caught in the current risk-off mindset. 

If there is one practical takeaway from Rudi’s outlook, it is to expect volatility and if possible keep some cash handy.

“We’ve seen each reporting season become more volatile than the last,” he says. “February is unlikely to be any different.”

Rudi currently holds around 10% cash, having previously deployed capital into names such as Sigma Healthcare (ASX:SIG), Washington H. Soul Pattinson (ASX:SOL) and Pro Medicus (ASX:PME). 

Holding cash, in his view, is less about market timing and more about flexibility and in this environment, Rudi says he'd love to have a bit more.