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AI Investment Thesis Took Its Lumps, But Remains Sturdy

BY | ETF Database
3:16 am ET 12/03/25 | 7 VIEWS
November was a tricky month for large- and megacap growth stocks. That was highlighted by the Nasdaq-100 (NDX) and S&P 500 Growth indexes finishing in the red in the 11th month of the year. Those negative performances were largely attributable to what some market observers are dubbing an AI “freak-out” or “shake-out.” But the encouraging news for investors considering AI-heavy ETFs such as the Invesco QQQ Trust (QQQ B) and the Invesco NASDAQ 100 ETF (QQQM B+) is that those funds rebounded late last month.More important than a few days of strength for QQQ and QQQM is the sentiment that the AI investment thesis, though recently battered, remains intact. It may be positioned for another year of upside in 2026.AI Sell-Off Was a Drag, Not a Death SentenceMany market participants have grown accustomed to the marquee holdings in ETFs such as QQQ and QQQM leading broader equity gauges. So when those stocks pullb ack, some investors become jittery. However, the recent AI pull-back could prove to be nothing more than a healthy correction. “I think you just had a moment where people decided to exercise some selling pressure,” said Dan Greenhaus, chief strategist at Solas Alternative Asset Management, in a recent CNBC interview. “And to me, it was momentary. It’s not emblematic of anything longer lasting.” For investors considering adding to existing QQQ/QQQM positions in the new year or entering those ETFs, there are other sources of encouragement. Greenhaus pointed out the themes of AI leadership and Federal Reserve rate cuts. Those cuts often benefit growth stocks, which would be likely to remain alive and well in 2026. Additionally, the AI adoption theme is expected to again be front-and-center next year. The evidence is there to support that notion. And it could be indicative of looming catalysts for QQQ and QQQM. “I read a bunch of conference calls, listened to a bunch where they talked about designing a marketing campaign… there was also a company that talked about designing a chemical product using proprietary corporate data and AI to design a brand-new product,” Greenhaus told CNBC. For those concerned about all the AI bubble talk, Greenhaus noted that, as was the case during the 1990s internet boom, some of today’s AI investments won’t bear fruit. But those expenditures are laying the foundation “for what eventually became quite substantial businesses.” That indicates QQQ and QQQM still merit consideration by investors with extended holding periods. For more news, information, and analysis, visit the ETF Education Content Hub.

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