The largest weekly outflow on record for technology stock funds hasn’t dimmed the broader euphoria that is driving US equities to “ferocious” gains, according to Bank of America Corp. strategists.

About $4.4 billion was pulled from tech funds in the week through March 6, strategists led by Michael Hartnett wrote in a note, citing EPFR Global data. The outflows come as Apple Inc. shares entered a technical correction this month, amid concerns about the firm’s slumping iPhone sales and regulatory pressures.

Hartnett — who has taken a more neutral tone on stocks this year after remaining bearish in 2023 — said equity markets are showing “abnormal gains” in “abnormal times” after a 25% rally in the S&P 500 since end-October. That’s left positioning “stretched and extended” ahead of expectations for an eventual interest rate cut by the Federal Reserve, he wrote in a note.

US stocks have scaled record highs this year, driven by the frenzy around artificial intelligence and optimism about a pivot in the Fed’s monetary policy. A narrow group of tech behemoths — the so-called Magnificent Seven — have driven a majority of the gains, but there’s been a growing dispersion between the stocks in the past few weeks.

While Nvidia Corp. has scaled record highs, Apple and Tesla Inc. have slumped 12% and 28%, respectively, this year.

Still, Hartnett reiterated that technology stocks could have more room to rally, even though semiconductors are trading at their highest level on record relative to the S&P 500.

Goldman Sachs Group Inc. strategists also don’t see a concentration risk in US stocks, as they say the top stocks trade at much lower valuations than the largest stocks did at the peak of the tech bubble.

“While investors usually think of elevated concentration as a sign of downside risk, the S&P 500 rallied more often than it declined” in the 12 months after past episodes of peak concentration, Goldman Sachs strategist Ben Snider wrote in a note.

For BofA’s Hartnett, the only factor that could “melt this determination” in markets is a drop in US payrolls. Latest data, due Friday, are expected to show the US economy added 200,000 new jobs last month.

This article was provided by Bloomberg News.