Did stocks trigger a “mini-panic” or something worse happened? What the experts say

Technology stocks have at times seemed unstoppable this year. Now they are in a rut.

The Nasdaq Composite rose nearly 60% between April 8, when uncertainty over tariffs was at its highest, and October 29, the index’s most recent record high. These gains were mostly driven by AI trading, which includes a diverse range of stocks across the technology, utilities and industrial sectors, all of which are seen as beneficiaries of massive AI investments made by major technology companies.

Recently, some investors have become concerned about the size of those investments, as well as when and how well they will pay off, although not everyone is convinced that AI stocks are in a bubble. Skeptics of this narrative list the highly profitable businesses of Big Tech, the Federal Reserve’s recent interest rate cuts, and the efficiency gains that artificial intelligence is expected to bring as reasons to remain optimistic.

However, the discussion helped reduce the overwhelming bullish sentiment that has prevailed for much of this year. Here’s what a select group of experts have to say about the recession and what it means for markets looking ahead to the end of the year.

Reading between the lines, many market watchers believe there is still life in the rally – although many offer degrees of caution, citing among other things the need to be selective with technology stocks; The potential for further gains as stocks approach their highs; And the need to continue to monitor profits.

What do experts say about the decline of artificial intelligence?

Dan Ives, managing director and chief equity research analyst at Wedbush Securities: “In short, we view this as a short-term mini-panic moment for tech stocks…. We believe Nvidia’s earnings next week will be another key validation moment for the AI ​​revolution and will be a positive catalyst for tech stocks through the end of the year as investors continue to underestimate the size and scope of AI spending.”

Jamie Cox, managing partner of Harris Financial Group: “For the vast majority of big tech companies, the conditions for a 1990s-style tech bubble don’t exist yet. Markets need a global crossover moment, with big private AI players hitting the IPO markets, before we can start talking about stock market bubbles. To me, this is a good way to pick up the highest quality tech names on the cheap.”

Thomas Lee, managing director and head of research at Fundstrat Global Advisors: “We should expect, from time to time, to take profits, because technology has been a leader over the last decade and is overbought… But for me, the fundamental story driving the technology, which is the productivity miracle coming from artificial intelligence, remains intact.”

Eric Thiel, chief investment officer at Comerica Wealth Management: “Given the retail nature of the momentum-fueled recovery since April, we believe the buy-the-dip mentality will remain in place until there is earnings or margin erosion among AI stocks… However, the controversy surrounding AI stocks is growing, and valuations are 45% higher than the forward earnings multiple for the rest of the market, suggesting a need for caution at this point.”

Ross Mayfield, investment strategist at Baird, on what it means for investors to shift away from technology and into lower-risk stocks: “I think it’s very healthy, both on the earnings front and on the price front, to see some broadening, especially at a time when the question about the broader economy outside of AI is, ‘How healthy is it?’

Mark Smith, Senior Vice President and Portfolio Manager at Wells Fargo Advisors: “[I’m] Not afraid at all. The numbers dictate that you shouldn’t be. Eighty-three percent of the names in the S&P 500 beat their earnings in the most recent earnings season, so there’s nothing to fear there. If you want a serious correction here, these numbers need to change.

Aaron Shechterly, Equity Portfolio Manager at Janus Henderson: “The impact of AI is real, and the demand for energy is significant. We choose to engage selectively on these topics, by focusing on companies that have proven business models, durable revenues, and free cash flow generation.”