Rally in U.S. big tech stocks may be getting stretched

A blistering rally in U.S. big tech stocks may be due for a breather, offering hope for market segments that have been more tepid this year.

Many investors believe the long-term case for tech stocks is solid, given their strong earnings and excitement over the revolutionary potential of artificial intelligence. But huge price gains, including Nvidia Corp’s is a sign that AI-fever might have gone too far, said Larry Tentarelli, chief technical strategist at Blue Chip Daily Trend Report.

Even if a pullback does occur, there are few signs investors would leave tech and growth stocks for long. Betting against tech has been a losing proposition over the last decade, as the Nasdaq 100 index has advanced more than 400% while the Russell 1000 Value is up about 70% over the same time. Tech could rebound fairly quickly as investors rush to buy the dip. The Nasdaq 100 took five weeks to reach a new high after falling as much as 9% in April.

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