by Jason Bodner
November 3, 2026
In February 1995, Newsweek ran a column by astronomer Clifford Stoll called, “Why the Web Won’t Be Nirvana.” He mocked the idea that people would ever shop online. Over 30-years later, the company that started selling books online just reported $202 billion in quarterly sales. Its stock fell anyway.
Doubting the future is popular in the mass media, but pessimism is usually not very profitable.
AI stocks took another gut-punch last week. Some companies collapsed as much as 27%. NASDAQ 100 futures were down about 2.5% before Friday’s open. Naturally, the headlines are saying: “The AI trade is dying!”
I’ve heard this song before. Over the summer, forced liquidations at Situational Awareness dragged AI stocks lower The narrative was there, but the death wasn’t.
Here’s what’s really happening: Investors are tired of paying for spending. Big firms are pouring so much into data-centers that free cash flow went negative. One plummeted 30% on Friday due to a shrinking PC business and weak guidance.
This isn’t a theme about technology dying… this is a bearish consolidation to prepare for the next leg higher.
The money isn’t leaving technology… it’s swapping segments and sectors.
Example: Last week, software stocks showed 27 unusual inflows against just 7 outflows. Internet and data services saw one inflow against 16 outflows. Over the past month, the median software stock is up 13.6% while the median chip equipment stock is down 17.4%.
Remember the “SaaSpocalypse”? Software was supposedly finished. Now 15 of the 20 top-ranked stocks in our technology universe are software companies.
Here’s what almost no one is talking about. While chip stocks get crushed, analysts are raising their numbers. Among chipmakers worth $1 billion or more, 66% have seen quarterly earnings estimates rise over the past month. Only 16% have seen them fall. Yet 82% of those same stocks are in a bear market.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Prices are falling while earnings estimates are rising. That sounds like opportunity to me.
Looking at every technology stock worth $2 billion or more that’s growing sales 25% or faster, I find 71 in my data. Analysts expect their earnings to grow 28% next year vs. 11% for the rest of the market. They trade at 25-times forward earnings, so you pay less per point of growth than for the average stock. Three of four have rising sales estimates. Four of five beat on sales last quarter and two of three are down 20% or more.
Growth is on sale.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
Outside technology, money is moving, not leaving. We logged 263 inflows against 188 outflows last week. Health care led with 63-buys, mostly big drugmakers and labs that serve them. Energy went 24-2 on oil above $100, and defense contractors led industrials for the same reason. Utilities had 17 buys and 0 sells.
The consumer is showing up, too, with buying in hotel REITs, apparel retailers, cruise lines, and restaurants. That fits GDP growing 3.4% last-quarter.
That’s not panic. That’s rotation. And rotation is what healthy markets do before the next advance.
Which brings me to the calendar. The midterms are Tuesday, and history is screaming bullish.
Since 1950, the S&P 500 has been higher 12-months after all 19 midterm elections, with an average gain of about 15%. Technology does even better. Since 1990, the NASDAQ 100 has been higher one-year after every midterm Election Day. That’s 9 for 9, with an average gain of 38.1%, and it beat the S&P 500 all 9-times.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
The seasonal tailwinds stack up too. The fourth-quarter of a midterm year has been positive 16 of 19-times since 1950, averaging 6.6%. And 2027 is the third year of the presidential term, the pre-election year. Since 1950, the S&P 500 has fallen in only two of them, 2011 and 2015, both by less than 1%. In our data, the NASDAQ 100 rose in all nine pre-election years since 1991, by an average of 42.2%.
It gets better. In midterm years with real turmoil before the election, the NASDAQ 100 averaged a 47.9% gain the following year. In calmer years, it averaged 25.8%. This year the index looks calm, but the median chipmaker is 34% off its high. The tumult is real. It’s just hiding behind the index.
Then there’s the Big Money Index (BMI). It bottomed out at 22.9% on October 14, then climbed to 35.3%. Since 1990, the BMI has exited oversold during a midterm year 12-times. The S&P 500 was higher one-year later every time, with an average gain of 14.4%. Two-years later, it was up 30.2% on average.
That’s three perfect records, all pointing in the same direction.
Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.
So where do the opportunities rise in 2027? I screened for stocks worth $2 billion or more in market cap-down at least 25% and also rank in the top quarter for fundamentals, with rising earnings estimates. That netted 73-stocks. Within those 73, over one-third (35.6%) were AI buildout companies: chips, storage, power equipment, and data-center builders. That’s not chance. That’s where the value is hiding.
The stocks being sold hardest have the best fundamentals and rising estimates. Add software already leading, health care and energy drawing steady money, and a consumer that keeps spending, and 2027 is setting up as a broad advance, not a narrow one.
Will it be smooth? Unlikely. One week after those BMI signals, stocks were higher only a third of the time. With interest rates above 5%, oil above $100, and an election this week, expect choppy markets. But chop after a bottom is normal. It’s how markets shake out the doubters before the next run.
My belief in these themes hasn’t wavered. Only the mood has. And moods, unlike data, don’t last.
As Seneca put it, “We suffer more often in imagination than in reality.”
All content above represents the opinion of Jason Bodner of Navellier & Associates, Inc.
Also In This Issue
A Look Ahead by Louis Navellier
Expect a Fractured G-20 Meeting in Florida Next Month
Income Mail by Bryan Perry
Using Energy Options to Take “Implied Market Volatility” to the Bank
Growth Mail by Gary Alexander
Today May Be the Best Day to Invest in the Post-Election Surge
Global Mail by Ivan Martchev
A Stock Market Bottom is Likely Within Reach
Sector Spotlight by Jason Bodner
Doubting the Future is Popular – But Not Very Profitable
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Jason Bodner is a co-founder and co-owner of Mapsignals. Mr. Bodner is an independent contractor who is occasionally hired by Navellier & Associates to write an article and or provide opinions for possible use in articles that appear in Navellier & Associates weekly Market Mail. Mr. Bodner is not employed or affiliated with Louis Navellier, Navellier & Associates, Inc., or any other Navellier owned entity. The opinions and statements made here are those of Mr. Bodner and not necessarily those of any other persons or entities. This is not an endorsement, or solicitation or testimonial or investment advice regarding the BMI Index or any statements or recommendations or analysis in the article or the BMI Index or Mapsignals or its products or strategies.
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