Deutsche Bank Turns Positive on US Tech After Sharp Selloff
Direct answer
Deutsche Bank has turned positive on US technology stocks again. The bank reversed a downgrade it made three weeks ago, saying the sharp selloff has gone too far and much of the worry about artificial intelligence spending is already reflected in prices. Reuters reported the change on November 2, 2026, based on a Deutsche Bank note from Friday.
What happened
Technology and large growth stocks fell about 11 percent over the past three weeks, while the rest of the S&P 500 rose nearly 6 percent. That left technology lagging the rest of the index by more than 16 percentage points, according to Reuters.
Deutsche Bank upgraded its stance on US technology stocks from neutral to positive. In simple terms, neutral means the bank had no strong view either way, and positive means it now sees the sector in a more favourable light.
The bank pointed to where technology now sits compared with the rest of the market. Its relative performance has fallen to the bottom of its long term range, a level that has marked attractive entry points in recent years, Reuters reported. FXStreet reported the same upgrade and the same figures, adding that the sector has bounced strongly from similar levels five times in the past two and a half years.
The selloff followed results from the largest technology companies, known as the Magnificent Seven. Those results raised questions about how quickly heavy spending on artificial intelligence will turn into profit. More than 2 trillion dollars was wiped off the Nasdaq 100 in October, a story already covered in detail in our post on the Nasdaq 2 trillion dollar wipeout in October.
Deutsche Bank also noted that previous moves back into technology after similar falls produced average gains of about 32 percent, with about 30 percentage points of outperformance against the rest of the S&P 500. That is a look back at past patterns, not a promise about what will happen next.
Why it matters for beginners
A bank upgrade does not change a company overnight. It changes how investors think about risk and value.
When a popular sector falls fast, two things can be true at the same time. Prices can be lower than they were, and the reasons for the fall can still be real. In this case, the reason is doubt about whether huge artificial intelligence spending will pay off soon enough.
For beginners, the useful lesson is about diversification. A portfolio spread across different sectors is less exposed to one sector falling sharply than a portfolio concentrated in technology alone. A single bank view, even a positive one, is not a reason on its own to buy or sell anything.
What to watch next
Watch whether technology stocks stabilise or fall further in the coming sessions, and whether the rest of the market keeps rising. Apple and Palantir were due to report results after the US market close on November 2, and those results will test whether investors still worry about artificial intelligence spending.
Also watch the next US jobs report, due on November 6, and the Bank of England decision on November 5. Both could change how investors think about interest rates, and interest rates affect how much investors are willing to pay for future growth.
FAQ
Does this mean technology stocks will now rise?
No. Deutsche Bank is giving its own view based on past patterns and current prices. Markets can keep falling after an upgrade, and past rebounds do not guarantee a future rebound.
Why did technology stocks fall in the first place?
Investors questioned whether spending on artificial intelligence would bring returns quickly enough. Results from large technology companies reinforced that concern, even though the companies are still very large and profitable.
What is the S&P 500?
The S&P 500 is an index of 500 large US companies. Comparing technology with the rest of the index shows whether technology is doing better or worse than the broader market, rather than just whether its price went up or down.
Should beginners act on a bank upgrade?
A bank upgrade is information, not personal advice. Beginners should focus on their own goals, time horizon, and risk tolerance, and on spreading risk, rather than reacting to one headline.
