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
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