Editor's note: This trend points to danger ahead...
While tech giants' revenues have been soaring – along with the massive amounts of cash they're spending in the AI race – their stocks have been falling.
According to Ethan Goldman, junior analyst at our corporate affiliate Chaikin Analytics, we could soon see the same story play out in the biggest name in the space.
In today's Masters Series, originally from the February 6 issue of the free Chaikin PowerFeed daily e-letter, Ethan breaks down the warning signs we're seeing...
A Dangerous Trend Hits Big-Name Tech Stocks
The largest company on the stock market is set to report its full-year earnings later this month...
Of course, I'm talking about chipmaker Nvidia (NVDA). And its stock has been under pressure recently...
NVDA shares are down about 12% from their 52-week highs late last year. The company's third-quarter "off the charts" revenue hasn't been enough to save the stock.
And now, a trend with big, AI-related stocks suggests that could happen again – or worse.
And given the recent performance of some other big names in the field, we can get an idea of what could happen to Nvidia's stock...
One of the biggest players in the AI space right now is Google parent company Alphabet (GOOGL)...
On February 4, Alphabet reported fourth-quarter and full-year earnings. And the company saw incredible growth in multiple categories during 2025...
Total revenue for 2025 grew 15% year over year to more than $400 billion.
In the fourth quarter alone, revenues at Alphabet's Google Cloud segment grew 48% year over year. And the company's "Google Search and other" business category saw year-over-year revenue growth of 17%.
This drove Alphabet's first year with more than $400 billion in revenue. Naturally, CEO Sundar Pichai attributed this performance to the company's AI progress.
Alphabet also said that it anticipates up to $185 billion in capital expenditures in 2026. These investments would mostly support Google's AI projects.
That's an eye-popping figure...
Heck, aside from the U.S. and China, that amount is more than any other country in the world spent on its entire military in 2024.
In short, Alphabet is "all in" on spending in order to keep a lead in the AI race. Meanwhile, the growing revenue should have been a positive sign...
But shareholders haven't taken to the idea quite yet. Alphabet's stock is down about 7% since it reported earnings.
As I said, we also saw large moves in the wake of earnings from other big names in the AI space...
"AI darling" Palantir Technologies (PLTR) struggled with this trend as well...
On February 2, the company reported massive revenue growth of 70% year over year for the fourth quarter.
Initially, the stock surged. PLTR shares jumped about 7% the day after the earnings release. But the next day, the same shares gave that entire gain back... and then some.
The stock is now down more than 30% over the past three months.
As regular Chaikin PowerFeed readers will recall, my colleague Vic Lederman shared the Power Gauge's warning on Palantir more than a week before the company's earnings report.
Advanced Micro Devices (AMD) – one of Nvidia's major competitors in the semiconductor industry – saw a huge loss in the wake of recent earnings as well...
On February 3, AMD reported a 34% year-over-year jump in revenue for 2025. And the stock fell by roughly 17% the next day.
Over the past three months, AMD is now down by about 13%.
To make matters worse for Nvidia, the "smart money" on Wall Street has been on the run from the stock since early January. And the stock had already started to underperform the broad market in late November.
The Power Gauge picked up on this. And our system has also flashed four separate sell alerts for the stock over the past three months.
Take a look...
Today, Nvidia earns a "neutral+" rating in the Power Gauge. This happens when a "bullish" or better stock is trading below its long-term trend line.
To be clear, I'm not saying to dump shares of Nvidia before the company reports earnings. And keep in mind that if the share price spikes, it could send Nvidia back into outright "bullish" territory.
But right now, the Power Gauge is picking up on some warning signs for the stock.
And based on what we've already seen from other big names in the AI space, don't be surprised to see big volatility after Nvidia reports earnings later this month.
Good investing,
Ethan Goldman
Editor's note: Marc Chaikin, founder of our corporate affiliate Chaikin Analytics, recommended Nvidia before it rose 50,624%.
Now he says you have just days to prepare for the rise of a new investment vehicle that could let you double your money... without touching Nvidia or any other popular AI stock.
But you need to position yourself before a big market move on February 17. Click here for the full details.
