NASDAQ Warning: Is Big Tech Losing Its Momentum?

Added: 2026-04-30

[00:00:00]The Nasdaq has seen one of its strongest rallies in history, nearly doubling from its 2023 lows. But recently, the trend has started to change. After peaking earlier this year, the Nasdaq saw a correction of more than 10%. Now, corrections like this are healthy in a long-term uptrend, and in this case, prices have already bounced back sharply. But this time, something underneath has started to shift. Now, one of the first places this starts to show up is in how the market is actually positioned. When we look at this recent move, it's not just prices that were correcting. We're now seeing a clear shift in positioning as well. QQQ, which is the largest ETF tracking the Nasdaq, has seen over $8 billion of outflows in a single month. This is the largest single month outflow we've seen in a decade. This shows a large capital is moving out of tech stocks, and that's where things start to change. This could be the start of a deeper reset in tech, or this rally may not be as strong as it looks, and we can see the capital rotating clearly when we compare Nasdaq relative to gold. When the line is rising, the Nasdaq is outperforming, which typically happens during strong risk-on environments. And when the line starts falling, it means gold is outperforming, which reflects a move towards safety. This is exactly what we're seeing right now. The ratio has been trending lower, indicating that money is actively moving into gold, which tells us that the markets are now starting to turn more defensive. At the same time, this shift also shows up in how the market is pricing tech. This chart shows the premium that tech stocks trade at compared to the broader market.

[00:01:28]Historically, tech companies traded at a premium relative to other companies because they grow faster, have higher margins, and can scale more efficiently.

[00:01:36]But with this recent correction, that premium has now dropped to the lowest level since 2019, meaning the market is no longer willing to pay the extra price for owning tech. Now, even though the excess premium in tech has disappeared, the reset in valuations hasn't fully played out yet. We can see this more clearly looking at Nasdaq's P/E ratio.

[00:01:55]The Nasdaq's rally had pushed its valuations to the most expensive level in the past two decades. And now, after the recent correction, valuations have cooled off, but they still remain well above its long-term 10-year average. So, even though valuations have come down, the Nasdaq is still not cheap.