The core of the Nasdaq 100 remains a handful of mega‑caps built around AI, cloud and advertising: Microsoft, Apple, Amazon, Alphabet, Meta and Nvidia. In 2025 these “super stocks” again generated an outsized share of index returns, with analysts noting that the Nasdaq 100 now trades on more than 30 times earnings and about six times sales—levels near historical peaks. Nvidia in particular has become the poster child for the AI infrastructure boom, reporting quarterly revenue of 57 billion US dollars in late 2025 and guiding higher again as data‑centre demand for its chips continues.[2][4][5][1]
Under the surface, though, there are early signs of a shift. By the end of 2025, several of the so‑called “Magnificent Seven” had stumbled, dragging on the Nasdaq 100 as investors rotated toward cheaper sectors and demanded clearer proof that massive AI capital spending will translate into durable profits. Some research houses now talk about “earnings convergence”, noting that while big tech earnings growth has slowed into the high‑teens to low‑20s percent range, the rest of the S&P 500 and Nasdaq constituents are quietly accelerating as they deploy AI to cut costs and improve efficiency.[6][7][3]
Looking into 2026, the key question around Nasdaq tech is no longer whether AI matters, but who is turning AI into cash flow. Chip leaders like Nvidia and select semiconductor names still sit at the heart of the theme, while cloud platforms are being judged on whether new AI services can support margins after years of heavy capital expenditure. With the Nasdaq 100 still heavily top‑weighted toward a small group of companies, any disappointment from these leaders could ripple quickly through index‑trackers, making position sizing and selectivity more important than simply owning “tech” as a block.[4][3][8][1][2]
Sources (links)
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Six charts on 2025 market drivers (Nasdaq 100 performance vs other indices):
https://www.trustnet.com/news/13466721/six-charts-that-show-what-powered-markets-in-2025[1] -
Stocks slide on weakness in megacap tech (Nasdaq 100 correction commentary):
https://www.nasdaq.com/articles/stocks-slide-weakness-megacap-tech-stocks[6] -
Crescat – “Megacap Tech Top” (valuations for Magnificent 7, Nasdaq 100 multiples):
https://www.crescat.net/megacap-tech-top/[9] -
Fortune – “Brutal year for stock picking spurs trillion-dollar fund exodus” (30x earnings, 6x sales, narrow leadership):
https://fortune.com/2025/12/27/mutual-funds-exodus-stock-picking-megacap-tech-ai/[2] -
MarketMinute – “Tech Megacaps Stumble as the ‘Magnificent Seven’ Drag …” (great rotation, earnings convergence):
https://markets.financialcontent.com/stocks/article/marketminute-2025-12-29-the-great-rotation-tech-megacaps-stumble-as-the-magnificent-seven-drag[7] -
S&P Global – Big tech earnings preview (AI capex, cloud and Nvidia link):
https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/4/big-tech-earnings-preview-microsoft-meta-amazon-apple[4] -
Policy Futures (UQ) – Nvidia record results and AI bubble debate:
https://policy-futures.centre.uq.edu.au/article/2025/11/ai-leader-nvidia-posts-record-results-warren-buffett%E2%80%99s-made-surprising-move[5] -
Mitrade – “Is Nasdaq 100 Still a Buy Heading Into 2026?” (AI ROI focus, mid‑cycle view):
https://www.mitrade.com/insights/indices/indices-trading/nas100-forecast[3] -
BofA – “Best 7 AI chip stocks to own in 2026” (AI cycle, chip names positioning):
https://finance.yahoo.com/news/bofa-says-best-7-ai-161543499.html[8]
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a qualified financial advisor before making investment decisions.