Big Tech Volatility Analysis: Market Rotation and Valuation Concerns

This analysis is based on the Schaeffer’s Investment Research report [1] published on November 14, 2025, which documented a turbulent week for technology stocks characterized by sharp rotation out of tech amid persistent valuation concerns.

The week’s trading revealed significant divergence across major indices. The Nasdaq Composite (IXIC) experienced extreme volatility, posting its best single-day percentage gain since May on Monday but then declining 1.69% to 22,870.36 on Thursday [0][1]. The index partially recovered on Friday with a 1.63% gain to 22,913.186, though still on track for a weekly loss [0].

Conversely, the Dow Jones Industrial Average (DJI) demonstrated relative strength, hitting record highs above 48,000 on Wednesday before experiencing a 1.49% decline to 47,457.22 on Thursday [0][1]. This divergence highlights a broader market rotation from growth-oriented technology stocks to value-focused industrial sectors.

Current sector performance data [0] clearly illustrates the ongoing rotation:

• Technology:
  +2.20% (recovering from earlier weakness)
• Communication Services:
  -1.86% (under pressure)
• Energy:
  +3.04% (benefiting from rotation)
• Utilities:
  +3.64% (safe-haven demand)

The shift into defensive sectors like Energy and Utilities suggests risk-off sentiment among investors, while the relative outperformance of industrial-heavy Dow components versus tech-heavy Nasdaq indicates a preference for value over growth characteristics.

The complete sale of SoftBank’s Nvidia stake for $5.83 billion represents a significant institutional signal [2][3][4]. The sale of 32.1 million shares at an average price of approximately $182 (below current levels of $188.95) suggests institutional caution about AI valuations despite the stock’s substantial recovery from its 52-week low of $86.62 [0][4].

Walt Disney (DIS) fell sharply on disappointing revenue, declining 1.79% to $105.68 [0][1]. Similarly, Rigetti Computing (RGTI) slid after a revenue miss despite trading up 2.02% to $25.71 [0][1]. These earnings misses reinforced broader valuation concerns across the technology sector.

The persistent concerns about AI bubble valuations appear to be the primary driver of the current rotation [1]. Unlike previous tech cycles, the current AI-driven growth narrative has created unique valuation pressures that may be more susceptible to corrections when institutional investors signal caution.

The White House’s indication that October jobs and inflation data may never be released due to impaired federal statistics during the longest government shutdown in history creates significant uncertainty [1]. This data gap complicates economic analysis and Fed policy decisions, potentially amplifying market volatility.

SoftBank’s complete exit from Nvidia, while framed as shifting focus to OpenAI, represents a substantial institutional profit-taking event [2][3][4]. This move may trigger similar positioning adjustments from other institutional investors, particularly given the high expectations surrounding AI-related stocks.

The upcoming November 19 earnings report presents significant risk with expectations running extremely high. Consensus estimates call for $54.83 billion in revenue (+56% YoY) and EPS of $1.25 (+54% YoY) [6]. While Nvidia has historically beaten estimates 90% of the time over 5 years, recent beats have averaged only 6.5%, suggesting limited room for substantial outperformance [6].

The combination of SoftBank’s strategic exit and persistent AI bubble concerns suggests potential for further tech valuation corrections [1][4]. Current market dynamics indicate that any disappointment in key tech earnings could trigger broader sector weakness.

The absence of key government economic data creates fundamental uncertainty for market participants and policymakers [1]. This information gap may lead to increased volatility as investors attempt to position without complete economic context.

The ongoing rotation into Energy, Utilities, and Financials may present opportunities in sectors benefiting from risk-off sentiment [0]. These defensive characteristics could provide relative stability during continued tech volatility.

Despite broader sector weakness, specific technology companies with strong fundamentals and reasonable valuations may become attractive at corrected levels. The current volatility may create entry points for disciplined investors.

The technology sector is experiencing significant volatility driven by valuation concerns, institutional profit-taking, and disappointing earnings. The Nasdaq’s underperformance relative to the Dow highlights a clear rotation from growth to value, with money flowing into defensive sectors like Energy (+3.04%) and Utilities (+3.64%) [0].

SoftBank’s complete $5.83 billion sale of its Nvidia stake represents a major institutional signal, particularly given the sale price below current levels [2][3][4]. This move, combined with ongoing AI bubble concerns, suggests caution may be warranted in high-valuation technology names.

The upcoming Nvidia earnings report on November 19 serves as a critical catalyst, with expectations for 56% revenue growth creating high stakes for performance [5][6]. Additionally, the absence of key government economic data due to the shutdown adds another layer of uncertainty to market analysis [1].

Current market data shows the Nasdaq attempting recovery with a 1.63% gain to 22,913.186, while the Dow remains relatively stable at 47,184.86 [0]. This divergence suggests the rotation trend may persist until key uncertainties resolve, particularly around tech valuations and economic data availability.