Tech Stocks Stumble as AI Rally Faces Scrutiny Ahead of Nvidia Earnings
The Nasdaq Composite's 60% surge since April, fueled by AI-driven optimism, shows signs of fatigue as investors question the sustainability of tech valuations. Nvidia's upcoming earnings report looms as a potential inflection point for the sector.
While AI beneficiaries across tech, utilities, and industrials propelled markets to record highs, concerns mount about capital allocation and payoff timelines. Bullish analysts point to Big Tech's robust fundamentals and anticipated productivity gains from AI adoption as reasons for continued optimism.
The concentration of tech stocks in major indices amplifies the market impact of this sector's volatility. With the Fed's rate cuts providing tailwinds, the AI trade now faces its first significant stress test since the April rally began.