'Don't rule out further drawdowns' in tech as current cycle hits 22 drawdowns in only two years – Turning Point Market Research

What happened

Technology sectors have seen 22 drawdowns since 2024, compared with 36 during the 1995-2000 tech bubble, Turning Point Market Research said. The average public tech stock is down 37.1% from its 52-week high amid an AI and semiconductor sell-off.

Confirmed

Global impact / market context

Frequent drawdowns mean sharp price falls are common in this tech cycle, so investors holding AI and chip stocks face repeated losses. The firm warns more painful drops may come, which argues for smaller position sizes and cash buffers rather than assuming quick recoveries.

Analyst inference

The current cycle has fewer drawdowns than 1995-2000 but is compressing them into two years, with chips and electronic components hardest hit. That pattern suggests investors are repricing AI and semiconductor shares fast, which can raise volatility across tech funds tracking these industries.

Analyst inference

What to watch

1. Watch whether the average tech stock's 37.1% gap from its 52-week high widens, since that shows selling pressure spreading beyond AI and semiconductor shares into the broader technology sector. Confirmed
2. Turning Point's suggestion not to rule out further drawdowns implies investors should consider holding more cash or smaller tech positions in case prices fall further. Proposed
3. Track semiconductor and electronic component drawdown counts, because each has already logged three, and more would signal the current cycle deepening toward the 1995-2000 pattern. Analyst inference

Evidence

• seekingalpha.com