NEW YORK, Aug 20 (Reuters) - Tech stocks are leading

declines on Wall Street, with worries about AI spurring debates

about its future. The Nasdaq Composite is down around 2.4% over

the last two days, the worst two-day fall since April.

The semiconductor index was down 1.5%, while the

information technology sector was the second biggest

decliner in the S&P 500, dropping 1.1% on Wednesday.

Market participants attributed the selloff to a range of

factors including a technical pullback after driving much of the

stock market's recovery in the weeks after April 2nd "Liberation

Day." Analysts also cited deepening concerns of government

interference with companies, as the Trump administration looked

into taking equity stakes in chip companies such as Intel in

exchange for grants under the CHIPS Act.

COMMENTS:

ART HOGAN, MARKET STRATEGIST, B. RILEY WEALTH MANAGEMENT,

BOSTON:

"Technology in general is up 40% from its April lows, and the

group clearly got ahead of itself. Also, if there's anything to

the market consensus that we'll see a Fed rate cut, then there

will be room for other things to work as well - and there are

493 other stocks in the S&P 500 that are lagging the Mag 7 right

now. So I think there's a bit of a rotation."

"I don't know how long it will last, but if it does keep going,

well, August and September (are) the weak period seasonally in

which it could do so. Also, there are some people who are

beginning to question the pace at which we need to be chasing AI

capital spending. If you put all this together: when technology

stocks take a breather, this is what it looks like. Nvidia and

other blue chips in the group are seeing relatively steady

drawdowns, but things on the speculative edge are clearly seeing

more selling pressure. Palantir has gone from trading at 200

times sales to 150 times its sales, for instance."

MICHAEL ASHLEY SCHULMAN, CHIEF INVESTMENT OFFICER, RUNNING

POINT, EL SEGUNDO, CALIFORNIA:

"Tuesday' s U.S. technology stock swoon and its continuation

today looks like multiple compression meeting a little margin

math, but the timing makes it hard to ignore the new elephant in

the server room. Names that had been sprinting on AI dreams

pulled back hard, with Nvidia, AMD, and Palantir Technologies

among the drags."

"DeepSeek's update landed on Tuesday represents a serious

cocktail of capability and availability and traders well

remember the original harsh tech-market pullback DeepSeek caused

when it was first broadly recognized in January of this year."

BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT,

BROOKFIELD, WISCONSIN:

"When you go from rally to rout, it shows how vulnerable the

names were to even a scent of bad news. It could have been

(Sam)Altman's valuation warning and then Meta restructuring its

AI division threw fuel on the fire."

PHIL BLANCATO, CHIEF EXECUTIVE OFFICER, LADENBURG THALMANN ASSET

MANAGEMENT, NEW YORK:

"It's much more about profit-taking and temporary rebalancing

here. If you get a Federal Reserve cut or a mention of it on

Friday, this will reverse pretty quickly, but this is a lot to

do with names pushed up to really lofty levels and profit taking

across the board."

SETH HICKLE, PORTFOLIO MANAGER, MINDSET WEALTH MANAGEMENT,

INDIANAPOLIS:

"I think we are starting to see a little bit of rotation. It's

always healthy to see a little bit of a pullback to that way,

the markets can kind of get re-oriented."

"To me, tech was overbought. Maybe it was justified, but it

could have been kind of a buy on the rumor, sell it on the news

type of thing where we had tech runup into earnings. We had

really good earnings, and now it's kind of natural for the

market just to sell some of that good news."

"I wouldn't be surprised if we see a little bit of rotation into

some smaller cap or into healthcare names, or consumer staples.

And to me, that's kind of a healthy rotation. But honestly, I

don't believe it will be a longer-term trend. It'll probably be

a shorter-term trend. I think we'll see money flow back into

tech in the next couple months."

STEVE SOSNICK, CHIEF STRATEGIST, INTERACTIVE BROKERS,

CONNECTICUT

"The tech-led selloff that we saw yesterday resumed this

morning. That said, dip buyers stepped in around 11am EDT and

we've now recovered about half our losses. It's somewhat

inevitable to expect them to arrive promptly, though it did take

a bit longer than usual."

"I believe that some of the early declines are related to

profit-taking and risk squaring ahead of (Fed Chair

Jerome)Powell's speech on Friday. That is merely rotation and

relatively benign, though it gets magnified because of megacap

tech stocks' heavy weighting in key indices. But some of the

ferocity of the early drop was related to the President's calls

for Lisa Cook's resignation."

"Note that futures broke through their pre-market lows shortly

after he posted on Truth Social. Markets were not perturbed that

there are inquiries into the propriety of her personal mortgage

applications. She gets a presumption of innocence until proven

guilty, like any other person. But when the President weighed in

even before the process began, then it raised the specter of

politicization. That put markets on the wrong foot early, and

negative momentum ruled again - at least for a couple of hours."

ADAM SARHAN, CHIEF EXECUTIVE, 50 PARK INVESTMENTS, NEW YORK:

"To see a little pullback here after a big move up is perfectly

normal and healthy. If the selling gets worse then you'll see a

rotation out of tech and into undervalued areas of the market

like biotech stocks or healthcare stocks or small cap stocks

because those areas have not participated this year."