Deutsche Bank Says US Tech Stocks Have Room to Fall Another 5% Before Bottoming

Deutsche Bank said the relative performance of US tech and large-cap growth stocks still has about 5% of downside before reaching the floor of a long-term trend channel, after the bank downgraded the sector to neutral from overweight on October 9. Since the downgrade, tech stocks have fallen about 7% while the rest of the S&P 500 has gained about 5%, a 12-percentage-point gap. Institutional positioning in tech has dropped to the 33rd percentile from the 85th in early October, though roughly $30 billion flowed into tech funds over the past two weeks, including $12 billion into leveraged ETFs, before turning to about $15 billion in net outflows on the latest trading day. Deutsche Bank expects the pullback to reflect rotation rather than a broad market decline absent a tariff or geopolitical shock. It maintained its S&P 500 target of 8,000 for 2026, with EPS estimates of $358 and $420 for 2026 and 2027, saying the downgrade concerns short-term risk-reward and does not alter its long-term growth view.