Concerns about a bubble in AI stocks have led to volatility in the market, with the S&P 500 (SPX) closing lower for four consecutive trading days, marking the longest losing streak since August. However, Wolfe Research isn’t sounding the alarm just yet.
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“We continue to believe that concerns over an AI bubble bursting are overblown … at least for now,” said Wolfe Research Chief Investment Strategist Chris Senyek. Senyek added that tech and communication services companies are “well positioned to weather a temporary storm.”
Investors Await Nvidia’s High-Stakes Earnings
All eyes are on semiconductor leader Nvidia (NVDA), which will release its earnings after the closing bell today. The numbers will likely affect both the S&P 500 and the Nasdaq 100 (NDX), as NVDA is the largest component in both indexes. Furthermore, the options market suggests that the results could move NVDA by 6% in either direction.
“It feels increasingly like the weight of the world is on NVDA,” said JPMorgan’s trading desk. Analysts expect the company to report revenue of $55.09 billion and EPS of $1.26.
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