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<\/figure>\n\n\n\nAfter Intel, Google, and Amazon\u2019s stinker, the sell-off is not limited to just a few tech stocks. AMD is scheduled to gap down by 6.26%, while Nvidia is holding stronger at -2.12%. Nebius is gapping down by -5.99%, while Micron is holding at a -3.75% gap down.<\/p>\n\n\n\n
You get the idea.<\/p>\n\n\n\n
The key question is this – are we entering a phase where reaccumulation is now a worthwhile play? And will the rest of the markets think so?<\/p>\n\n\n\n
From a technical perspective, many of these stocks are revisiting a rising trendline support<\/a> or a significant previous low.<\/p>\n\n\n\n But they are potential<\/em> support areas, not an instruction to buy. Losing them would make another leg down more likely.<\/p>\n\n\n\n Imagine pitching a business on Shark Tank: sales are booming, customers cannot get enough, and you want to double production.<\/p>\n\n\n\n The Sharks are intrigued; they lean in.<\/p>\n\n\n\n Then here comes the pitch: an ask of billions of dollars – beyond your current revenue – to spend before that growth pays for itself. The question changes from \u201cHow fast can you grow?\u201d to \u201cWhen do I get my money back?\u201d<\/p>\n\n\n\n That is the problem facing the AI trade, and we\u2019ve heard this problem before; it\u2019s the AI capex story all over again.<\/p>\n\n\n\n Alphabet\u2019s quarterly results showed revenue up 25% and Google Cloud sales doubling, up 103% to $30.7 billion. Yet capital expenditure reached $51.4 billion in the quarter, leaving free cash flow negative $9.1 billion<\/strong>.<\/p>\n\n\n\n Its longer-term cash generation is still positive. Investors are not being shown collapsing demand; they are being asked to fund an increasingly expensive expansion.<\/p>\n\n\n\n Amazon reported<\/a> AWS growth of 39.3% and $28.1 billion in quarterly operating profit. Nevertheless, trailing 12-month free cash flow swung from positive $14.8 billion to negative $42.4 billion,<\/strong> largely because of AI infrastructure spending. That contrast is why the market is questioning the returns on AI investment<\/a>, not necessarily the existence of demand.<\/p>\n\n\n\n Intel is a different story. Its revenue rose 21%<\/a>, but management expects its weak PC market to persist into 2027 and guided to just $0.25 in adjusted fourth-quarter earnings per share.<\/p>\n\n\n\n The takeaway is this: AI has not stopped growing, investors are simply spooked and repricing their expectations.<\/p>\n\n\n\n While the Nasdaq lost about 1.4% on Thursday, the Russell 2000 gained roughly 1%, and about four in five S&P 500 constituents advanced. Small caps and less AI-dependent sectors were attracting buyers.<\/p>\n\n\n\n This looks more like a rotation away from a crowded technology trade than indiscriminate selling so far<\/em>.<\/p>\n\n\n\n S&P 500 can fall because a handful of enormous companies carry disproportionate weight, even when its average constituent is doing better. And with roughly two-thirds of members still above their <\/a>50-day and 200-day moving averages<\/a>, the broader index has not yet experienced a widespread technical breakdown.<\/p>\n\n\n\n The risk is that continued AI selling eventually spreads to those healthier stocks.<\/p>\n\n\n\n There is at least a reasonable bounce setup. On the Google chart, the $275\u2013281 region is an immediate test; failure there leaves the deeper weekly target near $242 in play.<\/p>\n\n\n\n The MAGS ETF is testing a rising trendline while Stochastic RSI<\/a> is oversold and potentially forming a double bottom<\/a>. That is a reason to watch<\/em> for a turn, but ultimately, we\u2019ll still need more proof this turn is likely.<\/p>\n\n\n\n What I would personally watch is a gap down that turns into a buying candle that pushes MAGS back above its rising trendline. And that could be a sign that MAGS\u2019 more AI-heavy constituents (Google, Amazon, Nvidia, META) are making a recovery.<\/p>\n\n\n\nThe Sharks like the sales. They want to see the cash.<\/strong><\/h2>\n\n\n\n
S&P 500 Breadth is recovering.<\/strong><\/h2>\n\n\n\n
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<\/figure>\n\n\n\nCould the lows be close?<\/strong><\/h2>\n\n\n\n
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