chipped away<\/a> at the overwhelmingly bullish sentiment that prevailed most of this year. Here’s what a selection of experts have to say about the slump and what it means for markets looking toward the end of the year.\u00a0\n<\/p>\n Reading between the lines, many market watchers believe there’s still life in the rally — though many offer degrees of caution, citing among other things a need to be choosy with tech stocks; the likelihood of more profit taking with stocks near highs; and the need to continue to keep an eye on earnings.\n<\/p>\n
What Experts Are Saying About the AI Pullback <\/p>\n
Dan Ives, Managing Director and Senior Equity Research Analyst at Wedbush Securities: \u201cIn a nutshell, we view this as a short lived mini panic moment for tech stocks…. We believe Nvidia’s earnings next week will be another major validation moment for the AI Revolution and be a positive catalyst for tech stocks into year-end as investors continue to underestimate the scale and scope of AI spend.\u201d<\/p>\n
Jamie Cox, Managing Partner for Harris Financial Group: \u201cFor the vast majority of big-cap tech, the conditions for a 1990s-style tech bubble are not yet present. Markets need a Global Crossing moment, where the major private AI players hit the IPO markets, before we can start talking about equity market bubbles. For me, this is a good way to pick up the highest quality tech names on the cheap.\u201d<\/p>\n
Thomas Lee, Managing Director and Head of Research at Fundstrat Global Advisors: \u201cWe should expect, from time to time, profit taking, because tech has been a leader for the last decade and it is overbought\u2026 But to me, the underlying story driving technology, which is the productivity miracle coming from AI, is still intact.\u201d<\/p>\n
Eric Teal, Chief Investment Officer for Comerica Wealth Management: \u201cGiven the retail nature of the momentum-fueled recovery since April, we believe the buy on the dip mentality is in place until there is an earnings or profit margin erosion among the AI stocks\u2026 Nevertheless, the controversy surrounding the AI stocks is building, and valuations are 45% above the forward earnings multiple for the rest of the market, suggesting a need for caution at this juncture.\u201d<\/p>\n
Ross Mayfield, Investment Strategist at Baird, on what it would mean for investors to rotate out of tech into lower-risk stocks: \u201cI think it\u2019s incredibly healthy, both on the earnings front and on the price front, that you\u2019re seeing some breadth, especially at a time when the question about the broader economy outside of AI is, \u2018How healthy is it?\u2019 So this is a really good sign to me, and I\u2019m happy to take a little bit of gains from tech and rotate into some nascent leadership there in other sectors.\u201d<\/p>\n
Mark Smith, Senior Vice President & Portfolio Manager at Wells Fargo Advisors: \u201c[I’m] not frightened at all. The numbers are dictating that you shouldn\u2019t be. Eighty-three percent of S&P 500 names beat their earnings in the last earnings season, so nothing to be frightened about there. If you\u2019re gonna have a serious correction here, those numbers have got to change.\u201d<\/p>\n
Aaron Schaechterle, Equities Portfolio Manager at Janus Henderson: \u201cThe impact of AI is real, and the demand for power is significant. We are choosing to selectively participate in these themes, by focusing on companies with proven business models, durable revenue and free cash flow generation.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Key Takeaways Tech stocks have come under pressure in recent weeks, weighed on by concerns about an AI…\n","protected":false},"author":2,"featured_media":140265,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,61,60,80],"class_list":{"0":"post-140264","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-ie","12":"tag-ireland","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/140264","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=140264"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/140264\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/140265"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=140264"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=140264"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=140264"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}