Bank of America Corp.’s strategist Michael Hartnett says that the further cooling of the economic system of the United States may be the reason for the continuation of the downturn in the growth of shares of US technology companies.

The mentioned expert is optimistic in the context of the perception of the prospects of the dynamic of bonds in the second half of the current year. Michael Hartnett says that signs of a slowdown in the growth of the United States economic system may form the tendency, which will consist in a reorientation to securities remaining in 2024 at a considerable distance from expensive technology giants. In this case, the distance implies a lag.

In a note that was published on Friday, July 26, Michael Hartnett underlined that the latest data on the condition of the global economy indicate a negative state of affairs in the corresponding space. According to the strategist of one of the largest financial institutions in the United States, the moment is near when big technology companies will lose their dominant position.

It is worth noting that the negative scenario regarding the future prospects of the mentioned firms so far belongs to the category of assumptions that potentially, but not guaranteed, can become an unambiguous fact of objective reality. Technology companies are witnessing a rapid rise in the value of their securities against the background of the so-called boom of artificial intelligence. For example, this summer, Nvidia’s market capitalization crossed a kind of historical mark of $3 trillion. The mentioned company develops graphics processing units, which are necessary for the training and subsequent operation of artificial intelligence systems. AI is the main technology of modernity. This statement is objective, but there is a risk that the valuation of securities of technology companies involved in the development and dissemination of artificial intelligence is exaggerated.

Over the past two weeks, shares of technology giants such as Apple Inc., Amazon.com Inc., Alphabet Inc., Microsoft Corp., Nvidia Corp., and Meta Platforms Inc., have fallen in price. The corresponding downward tendency is related to the fact that investors are betting that the Federal Reserve will start lowering the cost of borrowing in the short term.

The market capitalization of companies included in the tech-heavy Nasdaq 100 index has decreased by about $2.6 trillion since this indicator reached a record level on July 10. This dynamic is largely due to concerns that large amounts of investment in the artificial intelligence industry may not pay off shortly.