Analyst warns AI spending is dragging tech stocks

On November 2, 2026, Eastmoney reported comments from Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services, warning that the technology sector's current pullback may not be over. Lerner noted that since 2023, the S&P 500 technology sector has experienced six drawdowns of 10% or more, four of which saw declines between 14% and 27%, and he believes this time will be no exception. He said the question is no longer simply whether AI demand is strong, but rather that Wall Street is increasingly demanding evidence that massive investment can translate into durable profits and cash flow.

The report reviewed the prior week's market action and capital-flow figures. US technology stocks fell broadly last week, with the Nasdaq Composite down about 2% for the week and 5.3% in October, its worst monthly performance since March 2025. The S&P 500 technology sector fell 4.24% on the previous Friday, the worst performance among the index's eleven sectors that day. The AI sector lost more than $1 trillion in market value on the same day, driven by investor concerns that heavy spending by large tech companies on AI would worsen cash flow. Citing this concern, the report pointed to Alphabet, parent company of Google, which reported third-quarter free cash flow of negative $9.065 billion, swinging from approximately $24.461 billion in the same period a year earlier. At the time of publication, details regarding Amazon had not yet been updated.