Deutsche Bank has upgraded its outlook on US technology stocks, saying the recent market selloff has gone too far and created a potential buying opportunity for investors.
The decision reverses the bank’s previous downgrade issued three weeks ago, as concerns over artificial intelligence (AI) spending and future growth weighed heavily on technology shares.
More than $2 trillion was wiped off the Nasdaq 100’s market value in October as investors questioned whether massive investments in AI would deliver sufficient returns.
According to Deutsche Bank, technology and major growth stocks fell about 11% over three weeks, while the broader S&P 500 gained nearly 6%.
The bank believes much of the concern surrounding AI investments is already reflected in current share prices. It also noted that technology stocks are trading near the lower end of their historical performance range, which has previously presented attractive buying opportunities.
However, concerns remain over the returns from heavy AI spending, particularly among major technology companies known as the Magnificent Seven.
Deutsche Bank’s latest assessment suggests renewed confidence in the sector, although market volatility and uncertainty surrounding AI growth could continue to influence investor decisions.
The upgrade highlights changing market sentiment as investors reassess the long-term value of US technology companies.
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