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The AI rally on the stock markets is losing momentum: many investors fear a bubble. At the same time, tech companies continue to report impressive profits. Is this the end of the upswing – or merely a pause? “In this phase, we rely on discipline, clear processes and long-term thinking,” says Thorsten Fischer, Managing Director and Head of Portfolio Management at Moventum AM. “Our motto is: time, not timing.”

The euphoria surrounding artificial intelligence (AI) has boosted not only the US economy in recent months but also the stock markets. Yet the AI rally is now losing steam: the Nasdaq index has seen notable declines, many investors are taking profits – and nerves are fraying.

Uncertainty is growing, particularly around the question of whether AI will deliver the anticipated increases in productivity, revenue and profit that would justify the enormous investments. Recent rumours about accounting tricks at tech giants – fuelled by warnings from investors such as Michael Burry, who criticised Nvidia and Palantir – have only added to the tension. The widely watched Fear & Greed Index, which measures sentiment using factors such as market momentum, volatility, market breadth and trading volume, now stands at “Extreme Fear”. Share prices are fluctuating sharply.

“Nevertheless, we see no reason to panic,” says Fischer. “There is currently no evidence of a fundamental decoupling of the share prices of major AI companies from their earnings.” This is supported by the recently published, surprisingly strong results from chip manufacturer Nvidia, one of the main drivers of the AI boom. Tech profits continue to rise significantly, helping to support equity valuations. Potential interest rate cuts by the US Federal Reserve could also provide long-term support for the technology sector.

Although the downward movement in the markets may continue – or even intensify temporarily – Fischer cautions investors to take sentiment seriously without being guided by it. “We do not make decisions based on sentiment, rumours or noise,” he explains. What matters are hard data and clearly defined processes in the investment strategy. “This disciplined approach has proven itself in our asset management over many years.”

Moventum’s guiding principle in the current situation is therefore “time instead of timing”. After all, asset management is about investing, not speculating. Investors should keep emotions out of their decisions, view setbacks as opportunities and pursue a clear, consistent long-term strategy. “Consistency creates resilience,” says Fischer.