Tech remains one of the most dominant sectors for Wall Street as Magnificent Seven tech stocks occupy about 27% of the S&P 500's (^GSPC) market value. AI was at the center of discussion for these companies, with plans on expanding investments in AI to be incorporated into their products and business models.

Hennion & Walsh CIO Kevin Mahn joins Yahoo Finance to discuss why he advises investors to consider tech stocks for 2024 and why cybersecurity stocks will be equally as important when making that consideration.

"I do think what's been lost in the AI race is the importance of cybersecurity, which I always call the glue that holds the technology puzzle together," Mahn states. "In fact, many have argued that the proliferation of AI could actually increase the number and the effectiveness of cyberattacks across the world. So you're going to need more AI to help combat AI-generated cyber attacks."

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

- So Kevin, when you think about then the opportunities that could be popping up, and especially how you're setting up for 2024, where are you putting new client money, especially when you're preparing for the expectation of rate cuts?

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KEVIN MAHN: Great question, Diane. It really does come down to what those clients objectives are, what their risk tolerance is, and what their investment frame is. If their goal is income, then we would certainly find tremendous opportunities on the fixed income side of the markets right now, in areas such as municipal bonds, or even preferred securities. Many of your listeners might be surprised to know that coming out of the end of rate hike cycles historically, preferred securities have been the best performing fixed income class, with an average annual return of just over 14% in the year following the end of rate hike cycles, which I believe we're in right now.

In terms of equities, if you're looking for growth opportunities, certainly we see a lot of potential in the information technology sector. And I don't dismiss the opportunities that exist in generative artificial intelligence or the transformative nature of AI. But I do think what's been lost in the AI race is the importance of cybersecurity, which I always call the glue that holds the technology puzzle together. In fact, many have argued that the proliferation of AI could actually increase the number and the effectiveness of cyber attacks across the world.

So you're going to need more AI to help combat AI-generated cyber attacks. So we see opportunities in the cybersecurity sector. Three stocks that we currently hold within our technology revolution trust here at Smart Trust include CrowdStrike, CyberArk, and Fortinet.