From "AI-phoria" to "AI-phobia": Nasdaq Plummets! Time to Rotate Into Defensive Sectors?
Just a few months ago, we were all riding the "AI-phoria" (AI euphoria) wave. Now, the market seems to have flipped into "AI-phobia" (AI fear) mode almost overnight. With the $NASDAQ(.IXIC)$ dropping over 2% last night and tech giants stalling, giants like Walmart and Coca-Cola are quietly hitting new highs.
Is this a turning point for the bull market? Should we be shifting our portfolios toward defensive sectors?
1. The AI "Reaper" is Looking for Losers
The logic has shifted. Previously, everyone believed AI would change the world; now, everyone is worrying: Whose rice bowl is AI going to break?
This anxiety is spreading from traditional software into the $10 trillion information services market, including finance, real estate, logistics, and law. If $700 billion in annual AI investment starts disrupting these sectors, the consequences are real:
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The Mag7 Myth Crumbles: Microsoft (MSFT) has officially entered a bear market, down over 25% from its recent high. Amazon (AMZN) followed suit after eight consecutive days of losses. Meta is now teetering on the edge of the bear market threshold.
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Capital Expenditure Pressure: Investors are no longer buying into "grand visions." Instead, they are anxious about aggressive AI spending plans and the resulting pressure on profit margins.
2. The Rise of "Defensive Titans"
As tech stocks face a "3-standard-deviation" sell-off, capital is fleeing to safe havens.
Consumer Staples and Utilities are leading the gains. $Wal-Mart(WMT)$ surged 3.78% and $Coca-Cola(KO)$ rose 0.51%, both hitting record closing highs.
If the future of AI is murky, should we return to traditional industries that generate steady cash flow?
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3. The Macro "Tightening": Is the Rate Cut Dream Over?
The January non-farm payroll report threw a bucket of cold water on heated rate-cut expectations.
130k new jobs were added, far exceeding the expected 55k.
A March rate cut is essentially off the table (probability dropped below 6%), and the market has pushed expectations for the first cut back to July.
Trump’s social media posts calling for the "lowest interest rates in the world" to save trillions in interest payments, the robust employment data makes it difficult for the Fed to pivot in the short term.
Discussion: Are You "Switching Cars"?
The market is currently at an extremely sensitive inflection point. On one hand, we have the valuation reset of tech giants; on the other, macro interest rate volatility.
What’s your take?
How far do you think the Nasdaq will fall?
Have you trimmed your tech holdings recently?
Share your portfolio strategy in the comments to win tiger coins!
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That doesn’t mean tech is finished. What’s breaking is the belief that mega-cap tech can rise endlessly without scrutiny. Stocks like Microsoft, Amazon, and Meta now need to prove AI spending can translate into profits. I’ve trimmed some stretched positions, but I’m holding quality platforms rather than exiting tech entirely.
On the macro side, strong jobs data keeps the Federal Reserve cautious, despite rate-cut hopes and noise from Donald Trump. My strategy remains a barbell: core tech for the long term, defensives to manage volatility. To me, this isn’t switching direction—it’s slowing down at a sharp bend.
@Tiger_comments @TigerStars @TigerClub
改變的是情緒，而不是基本面。
那麼投資者應該怎麼做呢？
重溫你的論文，而不是標題。如果你的信念建立在真實需求之上——數據中心、芯片、內存、基礎設施、企業採用，那麼情緒波動就是噪音，而不是論文破壞者。
我將繼續將美元成本平均投資於我最喜歡的科技股 $谷歌(GOOG)$ $英偉達(NVDA)$ 因爲這是抄底的最佳時機。
人工智能不會消失。但是市場呢？它會像鐘擺一樣繼續擺動。我的工作不是隨波逐流。我的工作是堅持我的信念，讓噪音像暴風雨一樣過去，很快就會過去。
@Tiger_comments @TigerStars @TigerClub @Tiger_SG @CaptainTiger
Check them in the history - "community distribution"
The bull market may be at a crossroads, with tech and AI stocks facing headwinds; most analysts view this as a mid-cycle correction, making it uncertain if this is a turning point for the bull market
Shifting portfolios toward defensive sectors like healthcare, consumer staples, and utilities could offer stability during downturns, as these sectors are less sensitive to economic cycles
It is tough to predict how far the Nasdaq will fall, but a correction is possible if deteriorating sentiment affects high-growth stocks; a deeper downturn could occur due to rising interest rates, with volatility likely as the market adjusts
Trimming tech holdings while keeping core positions could be prudent; profit-taking or shifting into other sectors can help manage risk in volatility
While the index has shown resilience over the long term, short-term jitters regarding the monetary payoff of AI investments and potential disruption in sectors like software have led to recent sell-offs.
Support Levels: Technical outlooks suggest that as long as the Nasdaq 100 remains above its 24,455 February low, the medium-term trend remains bullish.
Correction vs. Bear Market: Some strategists view the current dip as a 10% to 16% undervaluation opportunity in the tech sector rather than a fundamental shift toward a bear market.
Bullish Targets: Despite recent "risk reduction" selling, some firms maintain 2026 targets for the Nasdaq 100 as high as 30,000–32,000, seeing a crash as unlikely.
Analyst sentiment for February 2026 is cautious, primarily due to "AI bubble" fears and concerns that the "Magnificent Seven" valuations have priced in impossible perfection.
Correction Targets: Technical analysts identify the 22,300 area as a critical near-term floor, representing a ~10% drawdown from recent peaks.
Bear Case: If earnings guidance from key AI leaders like Nvidia (expected mid-February) or Broadcom (expected early March) disappoints, a deeper "ABC-style" correction could push the index toward the 20,000 level, a roughly 20% retracement.
Bullish Floor: Despite the rout, some strategists argue the secular uptrend remains intact, predicting the index will find support at 24,000 (Nasdaq-100 terms) and potentially rally to 28,000 later in 2026 as Fed rate cuts begin to compress discount rates.
For all the reactions that Trunp's announcement brought (precious metal big slump, equities going up) expecting that the new fed chair is a inflation hawk.
Once he acquiesce to the president's pressure, the fed's supposed independence (because of th inflation hawk) illusion will pop and markets will be in chaos.
We will see.
2. The Nasdaq will fall 40% on ai spending fears
3. No, there is no need to sell at this time with no chance in underlying other than sentiment