Wealth Managers See Long-Term Equity Case Despite Tech Selloff

The S&P 500 fell 4.4 per cent on Thursday, while the Nasdaq dropped 5.5 per cent. The Philadelphia Semiconductor Index slid 12.3 per cent, taking its decline since June to about 38.3 per cent. Losses spread into Friday, when North Asian technology-heavy indices led regional declines. The pullback followed an initial post-election rally and reflected concerns that Democratic gains in the US midterm elections could bring tighter AI regulation and restrictions on data-centre development.

Mark Haefele, chief investment officer at UBS Global Wealth Management, described the decline as a positioning reset, not evidence of a lasting downturn in AI investment. He sees potential for broad equity indices to rise over the next six to 12 months, while advising investors to manage concentration risk, rebalance excessive technology exposure and build a multi-asset core portfolio. He said earnings growth remains resilient and a positive global cyclical backdrop supports equities.

Julius Baer’s Enrico Chinello said federal AI rules could face a presidential veto and that state-level curbs, particularly in Texas, may pose a more tangible risk. His base case is that data-centre projects could be slowed at the margin, but not stopped entirely. He remains positive on cloud computing and AI. Isio senior fund manager Daniel Nilsson likewise said short-term volatility does not warrant trading around strategic positions, though valuations and concentration in US mega-cap technology call for caution. He pointed to global small caps, emerging markets, infrastructure and fixed income as sources of diversification.

Lombard Odier’s CIO Office also characterised the retreat as an unwinding of crowded positions rather than a sign of weaker AI demand, earnings or capital spending. It said falling bond yields point to contained inflation fears and slower but sustainable growth, not recession. The bank has rebalanced portfolios to add exposure, expecting the AI-led rally to broaden beyond a small group of mega-cap stocks.

Aberdeen Investments’ Pruksa Iamthongthong said near-term volatility could persist as investors assess construction delays and limits on computing capacity. She expects the longer-term impact to be manageable, noting that infrastructure can shift geographically and that Asian companies and supply chains may benefit. Forvis Mazars CIO Ben Seager-Scott said he does not see a technology bubble, and described his firm as progressively underweight US mega-cap technology this year in favour of an equal-weighted index.