Big Tech vanished from Wall Street’s 'overbought' list, who replaced it?

Data show no technology stocks among overbought names this week as investors rotate into banks, industrials and capital-markets plays.

Wall Street’s most overbought stocks this week include no technology names, indicating a clear investor rotation away from AI-driven growth and toward value-oriented sectors, according to a CNBC report.

The shift comes as investors lock in gains from high-flying technology stocks and move capital into financials, industrials and healthcare, sectors more closely tied to economic cycles.

Market performance reflects the rotation

The tech-heavy Nasdaq Composite fell 1.6 percent last week, bearing the brunt of the sell-off. The S&P 500 slipped 0.6 percent, while the Dow Jones Industrial Average gained 1.1 percent, highlighting the divergence between growth-heavy and value-heavy indices.

CNBC noted that stocks with a 14-day Relative Strength Index (RSI) above 70 are considered overbought and vulnerable to pullbacks. No stocks registered an RSI below 30, a threshold typically associated with oversold conditions.

Banks benefit from rate cuts

Buffalo-based M&T Bank emerged as one of the most overbought names, posting a 14-day RSI of 81 after gaining more than 5% during the week.

Regional banks rallied sharply on Wednesday after the US Federal Reserve cut interest rates for the third time this year, a move that investors see as supportive of loan growth and balance-sheet expansion.

However, caution is creeping in. In September, Morgan Stanley downgraded M&T Bank to equal-weight from overweight, even as analyst Manan Gosalia raised the stock’s price target to $251 from $236.

“M&T is a high quality bank with significant excess capital/liquidity, strong credit underwriting and growing fee businesses. With rates coming down, we see fewer positive catalysts in the near-term, and we are moving to the sidelines,” Gosalia wrote, as cited by CNBC.

The revised target implies a 23% upside from Friday’s close and sits above the consensus estimate of $220, according to LSEG data. Thirteen analysts rate the stock a buy or strong buy, while eight recommend holding it and one expects underperformance.

Analysts chase cyclicals, not chips

Other overbought stocks on CNBC’s screen have recently attracted fresh analyst support. Deutsche Bank upgraded J.B. Hunt Transport Services to a buy from hold, calling it its top pick in the trucking space.

UBS, meanwhile, initiated coverage of KKR & Co. with a buy rating, describing the private equity firm as its “preferred way to play a capital markets acceleration.”

What makes this rotation different

Unlike earlier pullbacks, the current shift is notable not just for selling in technology, but for the absence of even a single large-cap tech stock among overbought names. That suggests investors are not merely trimming positions, but actively reallocating capital toward sectors expected to benefit more directly from easing monetary policy.

If rate cuts continue and economic growth holds up, strategists say value-heavy stocks could remain in favor, leaving technology shares facing tougher comparisons after a multi-year rally.