Business & Finance

Tech Stocks Slide Despite Strong Earnings and Analyst Praise

By Brian Sozzi

Tech shares are falling sharply, even as major companies report solid earnings and analysts issue bullish reports. Apple posted a strong quarter with double‑digit iPhone sales growth, and its new CEO, John Ternus, did not mention the iPhone Duo "Crackgate" during the earnings call. Palantir also delivered a strong quarter and a positive outlook. Yet both stocks fell in premarket trading on Tuesday.

Wall Street has issued numerous optimistic notes on Apple, Palantir, and the hyperscalers over the past two weeks, but investors are not buying these names at the discounted valuations seen a month ago or at historical averages. For example, Nvidia shares are trading at very low valuations that many investors consider not cheap enough.

At the start of the sell‑off, the S&P 500 performed well, but the index excluding the "Magnificent Seven" Big Tech stocks was seen as a safer bet because many companies did not have free‑cash‑flow concerns and were growing steadily. The market now appears to be re‑rating all companies that are tied to the AI boom, as the pace of AI‑driven productivity gains may be slower than expected. The volatility is expected to continue as the market adjusts to these realities.