An imminent bubble explosion? Technological stocks are the first death cross in 3 years
After the artificial intelligence -led running (AI) running, technology shares now appear twice, with large -scale losses as technical indicators indicate more from the negative side.
Over the past year, the shares of technology led the market as investors are highly betting on the boom of artificial intelligence led by players such as NVIDIA (NASDAQ: NVDA).
However, stocks suffer from fluctuations alongside the broader market, raising concerns about whether the sector is mature to correct.
Technological stocks are formed in terms of pattern
Now, a major warning signal from the ETF for the S&P 500 technology sector, which formed the Detal Cross for the first time in more than three years.
This fateful technical style, where the moving average for 50 days (MA) crosses less than a 200 -day Master, has historically led to a declining momentum.
The last time ETF has seen a death cross, caused a 25 % decrease in the next seven months. Interestingly, this style has barely appeared a week after the formation of Nafidia.
The negative aspect of technology is partially driven by commercial definition, profit, and the possibility of fading noise from artificial intelligence. Amid these concerns, attention has turned to whether technology shares will repeat their historical performance when the last death cross is formed.
At the same time, in x mail On March 29, technical analyst JC Parets noted that weakness in technological stocks and high beta names, which started last summer, did not show any signs of reflection.
He pointed out that the proportional performance of technology against the broader S&P 500 has reached the New Cycle Lows, which is a disturbing trend for the sector. Also, high beta stocks decreased to the lowest levels in the cycle compared to low motor shares, indicating the transformation of the market towards defensive positions. It is worth noting that high beta stocks come with a high risk and reward.
Although market conditions apparently improve any time soon, especially with Donald Trump’s threat to new definitions, the sector appears to be linked to prolonged contraction, which raises the issue of whether the bubble explosion is imminent.
As of March 24, data from Global market investor Show The technology sector in 2025 has led to twice the performance of the S&P 500 by 5.9 %, which represents the largest margin of nearly 20 years. Historically, during periods of increased risks, investors tend to empty the most profitable but most dangerous shares.
Analysts take technology shares in the future
On the other hand, players on the market remain divided into the next step for the technology sector. As the company, Gerald Celente, the American Trend, warned that investors should expect a collapse in 2025 caused by artificial intelligence, similar to the explosion of the Dot-Com 2000 bubble.
On the other hand, some analysts, including Bmo The largest investment strategies, Brian Bilsky, argue that describing the current market as a bubble may be exaggerated.
Talk to Business InsiderBilsky male The rise in asset prices alone does not indicate an imminent explosion. Unlike the Dot-Com era, today market lacks the activity of reckless integration and purchases, exaggerated relay subscriptions, and the profits of the excessive investment bank.
“The market has been clarified over the past thirty years, and every time the market rises, investors say,” Oh, he will go! It will decrease. “This is very different from the late 1990s.”
Likewise, Goldman Sachs, the banking giant, rejected comparisons with the Dot -com bubble, on the pretext that the technology sector today does not suffer from the same level of speculation seen 25 years ago. The company confirmed that the basics of technology are still strong, with a stable evaluation and profit growth.
Goldman Sachs indicated that the 2000 shrinkage was characterized by excessive speculation and unrealistic revenue expectations.
Meanwhile, stocks such as NVIDIA faced losses after driving the market in 2023 and 2024. However, the company maintains strong basics, including strong revenue growth and optimistic estimates. Blackwell chips continue from the next generation to see the tremendous demand, as the company remains the undisputed artificial intelligence leader.
Distinctive image via Shutterstock
