A Tech Stock Reset Is Underway. Can They Survive Until Nvidia Earnings?

Comments from Wall Street CEOs reflecting concerns over tech valuations, which sit firmly north of their five-year averages, were tied to Tuesday’s selloff, as was a Securities and Exchange Commission filing that unveiled bets against two highflying AI stocks— Palantir and Nvidia —by famed investor Michael Burry. Tech’s overwhelming dominance of the S&P 500, where the top 10 stocks in the market comprise around 40% of its market value, and crucially a third of its collective earnings, exaggerates the ongoing pullback. Robert Edwards, chief investment officer at Edwards Asset Management in Naples, Fla., sees the current pullback as “a brief breather” that will be shortly reversed by a combination of “strong earnings and a Federal Reserve in full-on dove mode.”