Jyske Bank: AI stock plunge may stem more from position adjustment; investors should not panic-sell

Danske Bank of Denmark said the recent market price declines, especially the heavy losses in AI and technology stocks, warrant close attention, but investors should avoid panic selling. The bank noted that chip stocks have been hit hard, but this market turbulence does not appear to be entirely driven by deteriorating fundamentals. There are signs that position adjustments by institutions such as hedge funds, margin calls, and forced selling have exacerbated the market decline. This means the selloff does not necessarily signal that the AI investment thesis has collapsed. However, given continued uncertainty over data center regulatory policy following the U.S. midterm elections, the market may continue to face significant volatility. The coming days will be a critical period, as the market gradually assesses whether this decline is beginning to affect corporate earnings prospects or ultimately proves to be a sharp correction driven mainly by position adjustments and market sentiment.