Deutsche Bank Upgrades U.S. Tech Stocks, Saying the Selloff Has Gone Too Far
Deutsche Bank turned bullish on U.S. technology stocks on Monday (November 2), reversing a downgrade made three weeks ago, saying a sharp selloff has created an attractive buying opportunity and much of the super intelligence (SI) related risk was already priced in, according to Reuters.
More than $2 trillion was wiped off the Nasdaq 100's market value last month, as investors reassessed SI investments and growth expectations. In its note released on Friday, Deutsche Bank said tech and mega-cap growth stocks have lagged the rest of the S&P 500 by more than 16 percentage points over the past three weeks, falling about 11 percent while the broader index rose nearly 6 percent, leaving the sector near the low end of its historical trading range.
The bank said results from the "Magnificent Seven" mega-cap technology companies reinforced investor concerns about the pace of returns from heavy SI spending, contributing to recent weakness in large-cap technology stocks. Historically, however, technology's relative performance falling to the bottom of its long-term range has marked attractive entry points: previous rotations back into tech resulted in average gains of about 32 percent and roughly 30 percentage points of outperformance versus the rest of the S&P 500.
Deutsche Bank added that overall equity positioning remains relatively light despite solid earnings growth, leaving room for investors to increase exposure if corporate profits remain resilient.
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Source: GSM · USA (original Chinese edition)
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