Nasdaq 100 Forecast: Nvidia Slips, Traders Debate Rotation Out of Big Tech

Nvidia’s Earnings Jolt Tech While S&P 500 Futures Hold Steady

U.S. stock futures traded flat on Thursday as traders weighed Nvidia’s blockbuster earnings and its outsized role in the AI trade. S&P 500 futures hovered near the flatline, Nasdaq-100 futures slipped, and Dow futures gained about 0.2%. The muted index moves contrasted with a 2% dip in Nvidia, which alone makes up roughly 8% of the S&P 500.

Did Nvidia Deliver Enough for Wall Street?

Nvidia topped estimates with $46.74 billion in revenue versus $46.06 billion expected and $1.05 EPS against $1.01 forecast. The company projected $54 billion in current-quarter sales, also above consensus. But data center revenue—88% of its business—came in slightly short of expectations at $41.1 billion, sparking concerns after nine straight quarters of 50%+ growth. Despite soaring 56% year over year, the unit posted its slowest expansion since AI adoption began accelerating in 2023.

CEO Jensen Huang emphasized continued AI infrastructure demand, pointing to $3–4 trillion in expected global spending by decade’s end. Nvidia highlighted strong momentum in its Blackwell chip line, which accounted for 70% of recent data center revenue, and gaming revenue jumped 49% to $4.3 billion. Still, investors balked at ongoing uncertainty around U.S. licensing for H20 chip exports to China, which could represent $2–5 billion in quarterly sales if approved.

Will Chip Stocks Drag the Nasdaq?

The pressure extended beyond Nvidia, with AMD and Taiwan Semiconductor both slipping in sympathy. That weighed most on the Nasdaq, where mega-cap tech remains dominant. Some strategists argue the pullback is less about fundamentals and more about expectations running too high after the S&P 500 hit record levels. David Wagner of Aptus Capital Advisors called the decline a “knee-jerk reaction,” saying investors should “buy the pullback.”

Could Nvidia Spark a Rotation Out of Big Tech?

Adam Crisafulli of Vital Knowledge suggested Nvidia’s results may not harm the market overall but could accelerate an ongoing rotation into underowned sectors.

With the Dow and broader S&P up more than 3% and 2% respectively this month, investors appear willing to look beyond mega-cap momentum stocks in favor of lagging areas of the market.

Market Outlook

The broader indexes remain on pace for solid monthly gains, even as traders digest potential Fed-related turbulence following political pressure on central bank officials.

For now, Nvidia’s print underscores two key realities: AI demand remains robust, but stretched valuations leave little margin for error.

Traders should watch for any signs of renewed rotation into cyclicals and value sectors, particularly as the holiday weekend may keep volumes thin.

More Information in our Economic Calendar.