From CNBC · Chloe Taylor · · 1m 50s
Tech stocks tumble as investors flee to safety
A sharp selloff in technology stocks has sent investors rushing into defensive sectors like healthcare and utilities, raising questions about whether the retreat has gone too far.
In brief
A sharp selloff in technology stocks has sent investors rushing into defensive sectors like healthcare and utilities, raising questions about whether the retreat has gone too far. Technology stocks have fallen sharply since October amid AI spending concerns, prompting investors to shift into defensive sectors, though…
Tech stocks face renewed pressure
Technology stocks have been notably volatile in 2026, with concerns about artificial intelligence capital expenditure, cash flow, debt and circular financing sparking multiple bouts of volatility.
Nasdaq falls sharply in October
The Nasdaq Composite Index shed five point three percent in October after rising eight point seven percent year-to-date. It remains down zero point seven percent for November after dipping into correction territory.
Tech losses spread globally
South Korea's Kospi index, heavily exposed to semiconductors, lost sixteen point two percent in October and is down more than eight percent month-to-date. The MSCI World Information Technology index lost seven percent in October.
Investors shift to defensive stocks
Stocks in defensive sectors including consumer staples, healthcare and utilities have seen broad gains over the past month as investors seek more stable assets during times of volatility and uncertainty.
Analysts warn rotation overdone
Alastair Pinder, HSBC's head emerging markets and global equity strategist, said recent moves had been vicious and overdone.
“The market is already pricing greater execution risk and capex delays.”
Extreme valuation gap emerges
Walmart trades on forty times forward earnings near a record high, while Nvidia trades on thirteen times near a record low. Pinder said fundamentals broadly appear healthy despite the sharp repricing.
“The rotation into defensives looks extreme.”
Tech sector reversal complete
Information Technology went from the best-performing sector in the first half of 2026 with a twenty-eight point four percent rise to the worst performer in the second half after tumbling more than eleven percent.
“Information Technology has gone from penthouse to outhouse.”
The big picture
Technology stocks have fallen sharply since October amid AI spending concerns, prompting investors to shift into defensive sectors, though analysts say the rotation may have overshot.
