Brad Gerstner, founder and CEO of Altimeter Capital, said Friday that the recent pullback in technology stocks is a healthy correction after months of sharp gains. “The Nasdaq is up 40% from its April lows, and the market was kind of looking for a reason to breathe,” Gerstner told CNBC’s “Money Movers.” “What we’ve seen across the market this week is that everyone is looking for an excuse to sell. I think that’s healthy. We’re taking some of the air out of the bubble. There’s a wall of fear in front of us.” Concerns about rising valuations in the tech sector led to a big sell-off across the market this week, led by the artificial intelligence giants. The S&P 500 is down about 3% week to date, and the tech-heavy Nasdaq is down 5%. Gerstner said Altimeter’s position in Nvidia’s earnings was the largest it had ever been, but the company reduced its overall exposure last week as the rally in tech stocks gained momentum. Nvidia is scheduled to report earnings on Nov. 19, but “we reduced our overall exposure over the weekend because we felt the market was pretty hot,” he said. “As everyone else feels, we see consumer weakness and we think the market could take a breather toward the end of the year ahead of fourth-quarter results.” Still, Gerstner dismissed the idea that the market is in bubble territory. He likened the current artificial intelligence boom to past technological “supercycles” that had temporary setbacks but ultimately exceeded expectations. “In my experience of living through three supercycles: internet, social media, and cloud, they all ended up being much bigger than we thought,” he said. “We’re in the digestion phase right now. I think the digestion is going well because it prevents the bubble from forming that everyone was worried about. I don’t think we’re in a bubble.”
