After an 11% tech sell-off, are AI valuations attractive again? RSS CTA

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AI and big tech have sold off big time over the last month, as the market continued to punish dwindling cash flows amid an increasing cost of capital over the long run. Mega-cap tech fell about 11% in October while the rest of the S&P 500 rose nearly 6%, as money moved into value, energy, and financials.

The pullback quickly rippled across high-volume tech, dragging down custom silicon designer Marvell Technology (NASDAQ:MRVL) (-36.8%), server supplier Dell Technologies (NYSE:DELL) (-27.3%), and semiconductor heavyweight Advanced Micro Devices (NASDAQ:AMD) (-23.7%).

That rotation was directly reflected across InvestingPro’s ProPicks AI stock-picking strategies: while the flagship Tech Titans portfolio notched its worst monthly performance this year, strategies focused on value and cash flow like Mid-Cap Movers, Healthcare Heroes, and Best of Buffett soared.

But as headwinds continue to gather for the decade’s most prominent trade, our market analysis sees a timing problem in the narrative.

Let’s look at the hard data. As today’s revenues transform into long-term infrastructure for broad AI usage, consensus estimates have the Magnificent Seven’s combined free cash flow climbing from roughly $200 billion today toward $600 billion by 2030—a 3x jump in just four years. The capacity being built is already running and being paid for. What’s missing is time, not customers.

How long it will take for these companies to reclaim their all-time highs remains anyone’s guess. What’s clear is that a generation of opportunities has just gone on discount. This is exactly where ProPicks AI earns its keep: separating the durable businesses from the hype, and turning a market-wide repricing into alpha.

This month, that meant trimming two consumer winners that had run their course—PVH Corp (NYSE:PVH) at +18.9% and Fortune Brands Innovations (NYSE:FBIN) at +16.2%—and rotating into quality technology the sell-off had marked down: Power Integrations (NASDAQ:POWI), a debt-free power-semiconductor maker now trading near half its 52-week high, and Intapp (NASDAQ:INTA), an enterprise software leader whose cloud revenue grew 28% even as the stock pulled back to fair value.

Spotlight exits: Locking in gains as momentum softens

Recognizing when a rally has run its course is central to systematic rebalancing. During the live November rebalance, Mid-Cap Movers rotated out of two consumer holdings facing fundamental headwinds:

• PVH Corp (NYSE:PVH): Exited after a 31-day holding period for a +18.9% total return. The position was rotated out as momentum softened and liquidity thinned. Annual revenue growth stalled near -1.6%, slipping 3% last quarter alongside muted guidance. Meanwhile, a ~4% EBITDA contraction undercut earnings quality after a headline beat propped up by a one-off $107 million tariff refund. With average daily volume falling below one million shares, the portfolio favored names with stronger organic acceleration and deeper liquidity.
• Fortune Brands Innovations (NYSE:FBIN): Exited after a 31-day holding period for a +16.2% total return. Capital was reallocated amid lagging momentum and margin headwinds. Shares sit down 9% year-to-date near 69% of their 52-week high, compounded by a ~19% trailing EBITDA decline and a lowered full-year outlook. Despite last quarter’s ~50% jump in free cash flow to $179 million and security-segment growth, exposure was redirected toward holdings with clearer near-term catalysts.

New November additions: High-margin tech at a discount

The capital freed from those consumer exits was redeployed directly into two cash-generative technology providers marked down by the sector-wide pullback:

• Power Integrations (NASDAQ:POWI): Added during the November rebalance. A debt-free power-semiconductor maker up 32.2% year-to-date, the stock has pulled back to roughly half its 52-week high near $44. Second-quarter earnings of $0.37 per share delivered a ~16% beat, supported by operating margin expansion to 17% and projected forward earnings growth of ~49%. Backed by a pristine balance sheet anchored by $250 million in net cash and a new strategic partnership targeting AI data centers, an average analyst price target of $71.75 signals roughly 64% recovery upside.
• Intapp (NASDAQ:INTA): Added during the November rebalance. The specialized enterprise software provider saw its cloud annual recurring revenue (ARR) surge 28% to over $515 million, backed by a 123% net revenue retention rate and quarterly free cash flow more than doubling to $28 million. While an ~80% six-month rally reflects robust market confidence, a recent post-earnings pullback near its ~$42–$43 fair value presents an attractive entry window. Non-GAAP operating margins expanded to 22%, gross margins exceed 80%, and its Celeste AI sales pipeline grew 2.5x in a single quarter.

Investors can review the complete fundamental breakdown, financial health scores, and analyst models in the Pro Research Reports on InvestingPro.

Turning market-wide repricing into opportunity

Mid-Cap Movers has gained 29.1% over the past six months, outperforming the S&P Midcap 400 (+0.6%) by 28.5 percentage points. Since its launch, the strategy has delivered a total return of 113.3%, beating its benchmark by 57.8 percentage points.

Across the broader ProPicks AI platform, strategies continue to rebalance every month—from Tech Titans (+166.1% since launch) to Healthcare Heroes (+61.2% since launch)—ensuring capital consistently rotates into underpriced fundamental leaders while shedding positions whose momentum has peaked.

For investors seeking high-conviction ideas in the newly updated portfolios, full access to all ProPicks AI strategies costs just $9 a month.

: The author holds no position in the stocks mentioned. Data and financial metrics as of November 4, 2026.