AI, Big Tech bull case despite Nasdaq’s worst week since April
State Street reiterates bullish stance on AI trading despite Nasdaq’s worst week since April.
Chief Operating Officer Anna Paglia said momentum stocks still have legs because investors are reluctant to move away from the growth story that has led to gains all year long.
“How can you not want to participate in the growth of AI technology? Everyone was waiting for the cycle to change from growth to value. I don’t think that’s happened yet because of the momentum,” Paglia told CNBC’s “ETF Edge” program earlier this week. he said. “I don’t think the rebalancing trade will happen until we see a signal from the market that indicates a slowdown in these major trends.”
Paglia, who has spent 25 years in the exchange-traded fund industry, thinks the space is more likely to cool off by the beginning of next year.
“There will be a lot more focus on diversification,” he said.
His firm manages a variety of ETFs, including the technology sector. SPDR NYSE Technology ETFAs of Friday’s close, it has gained 38% so far this year.
But the fund retreated more than 4 percent last week as investors took profits from AI-related names. The fund’s second largest asset as of Friday’s close Palantir TechnologiesAccording to State Street’s website. Its shares are down more than 11% this week following the company’s earnings report on Monday.
Despite the decline, Paglia reaffirmed his bullish tech view in a statement to CNBC later in the week.
Meanwhile, Todd Rosenbluth suggests that a rotation is already starting to impact the market. It signals renewed appetite for healthcare stocks.
” Healthcare Select Sector SPDR FundThe company’s head of research said in the same interview: “… which had been out of favor for most of the year, started to turn around for the better in October.” “Healthcare tends to be a more defensive sector, so we’re watching to see if people continue to turn to that as a way to move away from some sectors like technology.”
Underperforming Healthcare Select Sector SPDR Fund technology This year, the sector has increased by 5% since October 1. It was also the second best performing sector. S&P 500 this week’s group.
