Nasdaq Three-Day Losing Streak: AI Valuation Divergence Ahead of Tech Earnings, Apple and Nvidia Technical Analysis

Nasdaq Three-Day Losing Streak: Market Sentiment Diverges Ahead of Tech Earnings Season

Recently, the Nasdaq Composite Index closed lower for three consecutive trading days, drawing widespread market attention. At this sensitive juncture just before major tech companies are set to release earnings, investors are clearly divided over the high valuations and sustainability of growth in the AI sector. This article analyzes the reasons behind the index pullback, the technical and earnings expectations of leading stocks, and concerns about an AI valuation bubble.

I. Macro and Micro Factors Behind the Nasdaq Pullback

On the macro front, the Federal Reserve's latest meeting signaled a hawkish stance, pushing back market expectations for the pace of rate cuts. According to the Fed's statement, interest rates may remain elevated for longer, directly suppressing valuation expansion for growth stocks. On the micro side, some tech companies issued earnings guidance that fell short of expectations, combined with geopolitical uncertainties, leading funds to flow out of high-beta sectors and into defensive assets.

Additionally, the persistent inversion of the U.S. Treasury yield curve reflects market concerns about the economic outlook. Against a backdrop of tightening liquidity, tech stocks, which have a heavy weighting in the Nasdaq, have borne the brunt, experiencing a technical correction.

II. Apple (AAPL) and Nvidia (NVDA): Divergence Signals from the Leaders

As one of the largest components of the Nasdaq, Apple's stock price has recently shown weakness. Technically, AAPL has broken below key moving averages, with rising volume indicating increased selling pressure. The market widely expects Apple's upcoming earnings to show a slowdown in iPhone shipment growth, especially in Greater China, where it faces strong competition from rivals like Huawei. Some analysts point out that Apple's relatively conservative approach to AI, lacking a "killer app" similar to those of other giants, puts its valuation premium to the test.

In contrast, Nvidia's (NVDA) situation is more complex. On one hand, its GPU monopoly in AI training and inference remains solid, with data center revenue continuing to grow rapidly. On the other hand, the stock has already surged significantly over the past year, with its P/E ratio at historical highs. As competitors like AMD and Intel accelerate their efforts, and some cloud providers begin developing their own AI chips, market concerns about Nvidia's future market share are heating up. Ahead of earnings season, NVDA's implied volatility in options remains high, indicating intense bull-bear battles.

III. High AI Valuations: Bubble or New Starting Point?

Since the current AI rally began in 2023, it has driven the Nasdaq to multiple record highs. However, as valuations climb, discussions about an "AI bubble" have intensified. Supporters argue that AI technology is moving from "proof of concept" to "large-scale deployment," with enterprise AI applications, autonomous driving, medical AI, and other scenarios set to create trillion-dollar market increments, making current valuations reasonable. Opponents counter that many AI concept stocks have yet to achieve stable profitability, with revenue growth rates severely disconnected from stock price gains. If earnings disappoint, valuation corrections could be severe.

In terms of fund flows, some institutional investors have recently begun reducing holdings in AI leaders and increasing positions in defensive sectors like energy and healthcare. This "sector rotation" suggests market sentiment is shifting from extreme optimism to caution. However, some argue this is merely a technical adjustment and that the long-term AI narrative remains unchanged.

IV. Earnings Season Preview: Market Awaits "Earnings Validation"

Over the next two weeks, several tech giants, including Apple, Nvidia, Microsoft, and Google, will release quarterly earnings. The performance of these companies will not only affect their own stock prices but also determine the near-term direction of the Nasdaq. The market is broadly focused on several key metrics: AI-related revenue growth, capital expenditure plans, and management's guidance for the second half of the year.

If the leaders deliver results that beat expectations and provide optimistic outlooks, it could reignite confidence in the AI sector and drive an index rebound. Conversely, if earnings disappoint or guidance is conservative, it could trigger a new wave of selling, increasing downward pressure on the Nasdaq.

V. Technical Analysis and Outlook

From a technical analysis perspective, the Nasdaq is currently near a key support level. If this level fails, it could test lower supports; if it stabilizes and rebounds, attention should be paid to volume confirmation. In the short term, market volatility is expected to remain high, and investors should closely monitor price movements around earnings releases.

In the medium term, the AI industry trend remains upward, but stock divergence will intensify. Companies with genuine profitability and technological moats are likely to navigate the cycle, while those relying purely on hype face greater correction risks. When positioning, investors should focus more on the alignment between fundamentals and valuations.

Risk Warning: The above content is for reference only and does not constitute investment advice. The market carries risks, and investment should be cautious. The data and views cited in this article are from public sources, and their accuracy or completeness is not guaranteed. Investors should make independent decisions based on their own risk tolerance.