‘Hold your ground’: Wall Street strategists say tech stock sell-off is a short-term blip as earnings bull case remains intact

Core Insights - Tech stocks faced volatility as investors shifted away from AI stocks, unwound expectations for a December rate cut, and reassessed the US economic outlook following the end of the longest government shutdown in history [1] - Wall Street strategists view the recent pullback as profit-taking and shutdown-induced volatility rather than a fundamental shift in the AI or earnings narrative [1] Group 1: AI Investment Perspective - Long-term AI investors are encouraged to maintain their positions, as the current market dynamics are seen as temporary [2] - Early-stage AI adoption is viewed as a significant multiyear theme, distinguishing the current situation from the dot-com boom and bust [3] - The recent pullback in AI stocks has unveiled attractive opportunities in software companies that have lagged behind the AI hardware boom [3][4] Group 2: Market Dynamics - The recent sell-off in AI stocks is attributed to mechanical factors rather than fundamental issues, with a deep concentration in AI names leading to a more significant average decline [5][6] - Profit-taking and positioning ahead of upcoming quarterly results are identified as key drivers of the recent market movements, alongside high expectations for earnings [6][7] - The interconnectedness of the index means that a decline in a significant portion of AI stocks can adversely affect the broader market [7]