Correction Hits Nasdaq as Tech Giants Face Market Challenges

Correction Hits Nasdaq: The 'Magnificent Seven' stocks are under pressure, impacting their valuation. The technology sector is witnessing shifts that may affect the stock prices of prominent players like Nvidia, Amazon, and Alphabet as they adapt to the current market landscape.

Date: 12-03-2025

AI Rating: 6

The report outlines how the Nasdaq has entered correction territory, emphasizing the influence of the 'Magnificent Seven' tech stocks on this decline. Notable companies mentioned include Nvidia, Amazon, and Alphabet, suggesting potential impacts on stock prices in the short term.

Nvidia: The company is highlighted as a leader in AI infrastructure, benefiting from increased spending in this area. However, it trades at a forward P/E ratio below 24 times 2025 estimates, indicating potential undervaluation. This could mean that despite current market pressures, Nvidia may present an attractive buy opportunity for long-term investors.

Amazon: Amazon's AWS segment is growing, particularly with a revenue increase of 19% last quarter due to its support for AI applications. Nonetheless, the company has significant costs, with a current stock valuation at a forward P/E of 31. This suggests the market may have priced in future growth but may also face challenges in short-term profitability metrics.

Alphabet: Alphabet is noted for its strong performance in cloud computing, with a Q4 revenue jump of 30% and operating income soaring 142%. This demonstrates robust growth and profitability metrics, potentially indicating favorable investor sentiment toward its stock. The forward P/E of 18.5 also signals it could be undervalued compared to its growth prospects.

Overall, investors may anticipate short-term fluctuations in the stock prices of these companies due to the current correction in the Nasdaq. Yet, the promising growth in AI and cloud computing sectors may offer long-term investment opportunities, especially for Nvidia, Amazon, and Alphabet.

Stocks: NVDA GOOGL AMZN