AI stock sell-off was a positioning reset, not weaker fundamentals, Raymond James says

what happened

Matt Orton, chief market strategist at Raymond James Investment, told TradingView that the recent drop in artificial intelligence stocks was driven more by a shift in investor positioning than by weaker business fundamentals.

Despite the correction, makers of graphics processors, central processors and memory chips keep posting record numbers, beating estimates and raising their forward outlooks. Orton hopes good news will start to lift share prices again, since the stocks have fallen even after strong reports.

He pointed to this week's results and capital spending plans from Alphabet, Microsoft and Amazon. The key question is whether these companies can balance AI investment with free cash flow. In his view, a good balance would support the market's push toward new all-time highs.

why it matters

For markets, the outlook depends not only on chipmakers' results but also on how the largest technology companies plan their spending. If AI costs start to weigh heavily on free cash flow, investors may reassess the sector. This is one strategist's view, not a forecast of price moves.

market impact

US AI and chip stocks: strong semiconductor results support the sector after the sell-off

• ▲US semiconductor stocks pressure up — strategist sees strong results and views the sell-off as positioning, not business weakness

instruments