AI stocks, typical of the recent bull market, have lost ground over the past month.
Nvidia ( NVDA ) , Microsoft ( MSFT ) , Alphabet ( GOOGL , GOOG ) and Amazon ( AMZN ) fell more than 15% during the period amid a broader market selloff that saw the Nasdaq Composite (^IXIC) further decline. from 10%, and the S&P 500 (^GSPC) slipped by more than 8%. Even as investors have begun to question the group’s recent earnings results, some strategists don’t think this is the end of the AI ​​run.
“We maintain our overweight on US stocks, driven by the AI ​​mega-force, and see the sell-off as presenting a buying opportunity,” BlackRock Investment Institute wrote in a research note late Monday.
Recession fears have weighed on the market as investors speculate whether the Federal Reserve is keeping monetary policy too tight. BlackRock describes these concerns as “overblown.”
“We believe growth will support risk assets and think markets are pricing in too many Fed rate cuts,” the team wrote.
Evercore ISI’s Julian Emanuel, who has the S&P 500’s year-end high of 6,000 on Wall Street, isn’t backing down either. In a note to clients on Monday, Emanuel noted that the recent rise in the CBOE Volatility Index (^VIX) presents an opportunity for “patient buying.” A rapid increase in volatility, as seen on Monday, usually ends with stocks rising a year later, according to Emanuel.
He compares the current moment to the big crashes in tech stocks during the “1994-99 boom bull market.”
“The case for AI, in a world where the global workforce is rapidly aging and efficiency will be critical to increasing productivity, is greater than ever,” Emanuel wrote. “We view the current AI Air Pocket as an opportunity to introduce a long-term secular theme.”
Still, while investors have shied away from big tech names as valuations have climbed to uncomfortably low levels, whether the recent decline has been enough to create an attractive buying opportunity is open to debate.
Goldman Sachs’ equity research team notes that while a basket of major tech stocks, including Apple ( AAPL ), Amazon , Alphabet , Meta ( META ), Microsoft and Nvidia are down 13% since July 10, revenue estimates have declined. move higher. All but Microsoft’s revenue estimates for the year to June 30, 2025 have increased.
This has resulted in multiple valuation cuts for the group of technology stocks, but they are still trading slightly above their 10-year moving average.
“Mega-communications tech stocks fell sharply, but their valuations continue to reflect AI optimism despite investor concerns about the likely timing,” David Kostin, chief U.S. equity strategist at Goldman Sachs, wrote in a note to clients Monday evening.
Josh Shaffer is a reporter for Yahoo Finance. Follow him with X @_joshschafer:.
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