Nasdaq Futures Tumble As Megacap Tech Leads Broad Selloff; AI Rally Enters Earnings Validation Phase

US equity futures slumped sharply on Tuesday, led by aggressive selloffs across megacap tech stocks. The bearish sentiment spilled over to Asia AI-themed equities, as traders track fresh developments from ongoing US-Iran peace negotiations.

Asian tech sectors suffered a sharp reversal, snapping an 8-session winning streak. South Korean stocks crashed nearly 10%, while Japanese equity markets also retreated sharply.

Large-cap tech stocks now move in highly synchronized swings:Alphabet stayed bearish, and SpaceX edged lower as IPO speculative frenzy fades. Risk-off sentiment has spread across the whole tech sector, and investors turn broadly cautious toward growth assets.

The market logic has witnessed a drastic shift vs last year’s AI bull cycle. Previously, any AI-concept stock gained blind institutional buying regardless of operational fundamentals.

Currently, the market steps into AI performance verification stage: investors demand actual profit returns to justify massive AI infrastructure capital expenditure. Cash-flow-negative firms face massive valuation pressure, notably SpaceX, which raised $75 billion via IPO financing with no positive cash flow.

Market sentiment remains fragile this week, with all eyes fixed on Micron Technology’s earnings call for verified AI industry demand cues.

“Most investors hold sizable floating profits on AI stocks, and minor price swings will trigger large-scale profit-taking. Besides, tech equities remain highly sensitive to Fed rate hike expectations.”

— Jian Shi Cortesi, Portfolio Manager, Gam Investment Management