-
Technology stocks sold off on Tuesday after Anthropic’s latest artificial intelligence tool hit software stocks.
-
JPMorgan’s Stephen Parker emphasized the rotation of technology as a healthy development.
-
The strategist sees opportunities in areas such as industrials and energy stocks.
Wall Street is still recovering from the massive selloff that swept technology stocks on Tuesday, but a senior strategist at JPMorgan Chase & Co. said investors shouldn’t worry.
Software stocks reacted negatively to news of a new add-on for its Cowork agency that enhances the capabilities of its legal work. Volatility spread quickly as investors dumped many software stocks.
However, Stephen Parker, co-head of global investment strategy at JPMorgan Private Bank, said the panic was overblown. In fact, he sees it as a healthy rotation as investors move toward better opportunities and away from technology-driven markets.
Parker addressed the sell-off in software stocks in a CNBC interview and laid out why he remains bullish on tech stocks and the broader market despite Tuesday’s chaos. In his view, this decline actually marks a positive development as market conditions shift and the tech industry enters a period of adjustment.
“We’re seeing rotations,” he said. “This is about an expansion of the recovery story. Cyclical investors are picking up the slack and it’s not just AI infrastructure and hyperscalers that are driving the market higher.”
The strategist said the beneficiaries of AI are likely to continue to wreak havoc, especially in areas such as software that are considered particularly vulnerable to AI disruption. While his team still likes the tech sector, they also think other industries are poised for growth.
These areas have not received as much attention as artificial intelligence, but Parker’s optimistic thesis means that may be about to change as technology disruption drives investors toward other opportunities.
“Whether you think about cyclical opportunities in the U.S. or there are broader opportunities. We really like industrial stories and power stories,” he said.
Parker doesn’t see opportunities just in the United States, either. He added that his team is bullish on international markets, which have been growing steadily and show no signs of slowing down. He urged investors not to ignore the global picture of continued growth in emerging markets.
Parker cited the leadership he sees in these emerging markets as a reason for his bullishness and said he was encouraged by the fact that they were leading the economy through a year of solid growth. Goldman Sachs also sees it as an area to watch in 2026.