Is the sell-off in technology stocks temporary or permanent?

After the earnings season of giant technology companies started with weak figures announced by Tesla and Alphabet, investors began to evaluate whether the artificial intelligence rally is over. After the earnings season of giant technology companies, known as the “Magnificent Seven” in the US, started with weak figures announced by Tesla and Alphabet, investors began to evaluate whether the artificial intelligence rally is over. The sell-off in technology stocks following yesterday’s earnings reports caused the S&P 500 index to have its worst day since December 2022, while the Nasdaq 100 fell 3.7 percent. For the fourth session in a row — and for the 10th time in 11 days — the performance of smaller companies outperformed the larger ones, showing that the rotation in stocks is continuing. Steve Clayton of Hargreaves Lansdown said 2024 could be the year when markets start talking about the “Eh Here’s the Seven” and that the balance sheets of Tesla and Alphabet are not enough to sustain the momentum of the group. “We don’t think these balance sheets provide clear answers to questions about the effectiveness and profit potential of AI at this time,” said Kathleen Brooks, research director at XTB. “The problem with technology is not just that the balance sheets are not perfect, but the group is still caught up in the violent rotation that started with the US CPI in June. Many assumed the anti-tech rotation would be temporary and the fact that it is here to stay is adding to the anxiety around the group and encouraging additional selling pressure,” said Adam Crisafulli of Vital Knowledge.