A top JPMorgan strategist says the software-driven tech sell-off is actually a healthy rotation into ignored parts of the market

• Tech shares sold off on Tuesday after Anthropic's latest AI tools hit software stocks.
• JPMorgan's Stephen Parker highlighted the rotation from tech as a healthy development.
• The strategist sees opportunities in areas like indutrial and energy stocks.

Wall Street is still recovering from a big sell-off that swept tech stocks on Tuesday, but a top JPMorgan strategist says that investors shouldn't be worried.

Software stocks reacted negatively to news of Anthropic's new plugins for its Cowork agent, which enhanced its abilities for legal work. The volatility quickly spread as investors rushed to exit positions in many software stocks.

According to Stephen Parker, the co-head of global investment strategy at JPMorgan Private Bank, though, the panic is overblown. In fact, he sees it as a healthy rotation as investors pivot towards better opportunities and away from the tech-driven market.

Parker addressed the software stock sell-off in a coversation on CNBC, laying out why he's still bullish on tech and on the broader market, despite Tuesday's chaos. In his view, the slide actually signals a positive development as market conditions shift and the tech sector enters a corrective period.

"We're seeing a rotation," he said. "It's about a broadening of the recovery story. Cyclicals are picking up the slack, and it's not just the AI infrastructure plays and the hyperscalers that are driving markets higher."

The strategist said that AI beneficiaries are likely to continue causing disruption, particularly in areas like software that are seen as especially prone to AI disruption. And while his team still likes the tech sector, they also think other industries are poised for growth.

These areas don't receive as much attention as AI, but Parker's bullish thesis implies that this may be about to change as disruptions in tech push investors toward other opportunities.

"There's also opportunities more broadly, whether you're thinking about cyclical opportunities in the US. We really like the industrial story and the power story," he stated.

The opportunities that Parker sees aren't only in the US, either. He added that his team is bullish on international markets that have been growing steadily and don't show any signs of slowing down. He urged investors not to disregard the global story as emerging markets continued to grow.

Parker cited the leadership that he has seen from these emerging markets as a reason for his bullishness, stating that he is encouraged by the fact that they have guided their economies through a year of solid growth. Goldman Sachs has also touted them as an area to watch in 2026.

"If you're looking for opportunities that may not be as specifically focused in technology, that are beneficiaries from this global broadening, markets particularly Asia, [excluding] Japan, that we think are going to be big beneficiaries," he added.