AI, Big Tech bull case despite Nasdaq’s worst week since April

State Street reiterates its bullish stance on AI trade though Nasdaq’s worst week since April.

Momentum stocks still have legs because investors are reluctant to walk away from the growth story that has driven gains all year, said Anna Paglia, chief business officer.

“How can you not want to participate in the growth of AI technology? Everyone has been waiting for the cycle to change from growth to value. I don’t think that’s happening yet because of the momentum,” Paglia told CNBC.Edge ETFs“I don’t think trade rebalancing will happen until we see a signal from the market that indicates a slowdown in these macro trends,” he said earlier this week.

Paglia, who spent 25 years in the exchange-traded fund industry, sees a greater possibility that the field will cool down early next year.

“There will be a greater focus on diversification,” she added.

Her company manages several ETFs with exposure to the technology sector, including… SPDR NYSE Technology ETFwhich was up 38% so far this year as of Friday’s close.

However, the fund fell more than 4% over the past week as investors booked profits in AI-related names. The fund’s second-largest contract as of Friday’s close is Palantir TechnologiesAccording to the State Street website. Its shares fell more than 11% this week after the company’s shares Earnings report on Monday.

Despite the decline, Paglia reiterated her bullish technology view in a statement to CNBC later in the week.

Meanwhile, Todd Rosenbluth points out that rotation is already starting to take over the market. It signals a renewed appetite for healthcare stocks.

“the Healthcare Fund Select Sector SPDR“…which had been out of favor for most of the year, began to return to favor in October,” the company’s head of research said in the same interview. “Healthcare tends to be a more defensive sector, so we’re watching to see if people will continue to gravitate toward that as a way to diversify away from some of those sectors like technology.”

Healthcare Sector SPDR Fund, which has performed poorly technology The sector has increased this year by 5% since October 1. It was also the second best performance Standard & Poor’s 500 group this week.