Chris Harvey, a senior market strategist at CIBC, said the market is still in a momentum phase despite recent selling in mega-cap technology stocks [1, 2].
This assessment comes as investors weigh the sustainability of high-valuation tech stocks against broader economic growth themes. The persistence of momentum suggests that the current market cycle is not yet exhausted, potentially signaling further upside for growth-oriented assets.
Speaking during CNBC's "Closing Bell Overtime" broadcast, Harvey said the volatility seen in the largest technology firms [1, 2]. He said that while some investors have begun selling off these mega-cap positions, the overarching trend remains positive.
Harvey said that the market's momentum persists because investors are still riding the AI trade and other growth themes [3]. This suggests that the appetite for artificial intelligence integration and the resulting productivity gains continues to outweigh the risks associated with high stock prices.
According to Harvey, the market's current state reflects a broader commitment to these technological shifts. The selling in specific mega-cap stocks may represent a rotation or a temporary correction rather than a fundamental shift in market sentiment [1, 2].
By framing the current environment as a momentum market, Harvey said that the trend of buying into growth is still the dominant force. This perspective contrasts with more bearish views that suggest the AI-driven rally has reached a peak.
Throughout the discussion, Harvey said that the underlying drivers of the trade remain intact. The focus on AI as a primary growth engine continues to guide investor behavior across various sectors [3].
“the market is still in a momentum phase despite recent selling in mega-cap technology stocks”
This analysis suggests that the artificial intelligence rally has not yet entered a full-scale reversal. By identifying the market as being in a 'momentum phase,' Harvey indicates that the trend is self-sustaining, meaning that price increases are driving further buying regardless of traditional valuation metrics. This implies that the 'AI trade' is viewed by institutional strategists as a long-term structural shift rather than a short-term speculative bubble.
