BofA: Investors are already fleeing Big Tech stocks

According to analyst Michael Hartnett of Bank of America, investors are starting to leave tech stocks after the unusually fast growth caused by the furor around artificial intelligence. According to Hartnett, a so-called "baby bubble" has formed in the market, similar to the situation that occurred in 1999, Bloomberg reports.

One sign of this phenomenon is a $2 billion outflow of funds from the tech sector in the five trading days leading up to June 21. This is the largest outflow in the last 10 weeks, according to EPFR Global. Investors have left the Nasdaq 100 index, which is up 38% for the year and is poised for its biggest semester since 1999.

Market growth slowed this week after Federal Reserve Chairman Jerome Powell, who warned that additional interest rate hikes may be needed this year.

Hartnett notes that while over-positioning and positive investor sentiment do not rule out new growth, there is more chance of a downside than a rising stock right now. His team sees upside potential in the 100 to 150 point range for the S&P 500.

Another strategist, this time from Wells Fargo Securities, pointed out that the market is now reminiscent of the technology boom of 1999-2000, which did not end until the Federal Reserve took action to tighten monetary policy. which led to a shaking in the stock market.