JPMorgan's global strategy team does not expect AI stocks to recover from their October drawdown as quickly as they did after July's correction. Its strategist points to weaker dip buying, fewer buybacks and fewer short positions.
JPMorgan does not anticipate a recovery in artificial-intelligence stocks anywhere near as speedy and emphatic as the one that followed July's selloff. October has also been an ugly month for the sector.
July's correction, by comparison, was short-lived, and the rebound was fast and meaningful.
Nikolaos Panigirtzoglou is telling investors that the buy-the-dip mentality is lacking and that company buybacks have dwindled. He adds that there are fewer short positions in the market to provide a bid when share prices fall.
He also points to more leveraged assets sitting in exchange-traded funds than there were previously.
Source: MarketWatch (snippet-based)
Trading involves risk.
Risk Disclaimer
