It’s no secret that artificial intelligence (AI) stocks have been a hot commodity in the recent bull market. However, over the past month, these high-flying stocks have hit a rough patch. Companies like Nvidia, Microsoft, Alphabet, and Amazon have all seen their share prices tumble by more than 15% amid a broader market sell-off.
Despite the recent downturn, some experts believe that this is just a temporary setback for AI stocks. BlackRock Investment Institute, for example, continues to maintain an overweight position in U.S. equities, driven by the AI mega force. They see the current selloff as an opportunity to find great buying opportunities in the market.
Recession fears have been a major factor in driving the market lower, with investors worried about the impact of the Federal Reserve’s monetary policy. However, BlackRock believes that these concerns are overblown and that growth will ultimately support risk assets.
Julian Emanuel from Evercore ISI is also bullish on the future of AI stocks. Despite the recent volatility in the market, he sees this as an opportunity for patient buying, similar to the tech stock drawdowns seen during the “1994-99 Boom bull market.”
So, should investors take advantage of the recent dip in AI stocks? According to Goldman Sachs, while the valuation multiples for these tech giants have contracted, they still trade slightly higher than the 10-year median average. This suggests that there may still be some optimism priced into these stocks, despite investor concerns.
In conclusion, the recent “AI Air Pocket” may be a temporary blip on the radar for AI stocks. Investors who believe in the long-term potential of artificial intelligence may see this as an opportunity to gain exposure to a secular theme that is likely to drive productivity enhancements in the future. Stay tuned to Extreme Investor Network for more in-depth analysis and updates on the latest stock market news and events.