The Nasdaq 100 Index ETF (QQQ) has risen over 16% in 2026, but tech stocks faced significant challenges in July, suffering a correction of about 10%, with some growth stocks experiencing their worst drawdowns since the COVID-19 crash of 2020. Despite this, there are indications of a recovery as QQQ recently regained its 50-day moving average, signaling a potential bullish trend.
Key data shows that S&P 500 earnings for Q2 are projected to rise by 47% year-over-year, marking the fastest growth rate since Q2 2021. Additionally, the proportion of S&P 500 companies beating earnings estimates is at a record high. Companies such as Oracle, Google, and Amazon are experiencing triple-digit growth in backlogs related to AI infrastructure, while GPU rental rates, a crucial economic indicator, continue to rise.
Amidst market volatility, analysts believe that the current drawdown may present buying opportunities, especially in AI stocks. Factors such as rising profits, expanding capital expenditures (CAPEX), and investor sentiment suggest that the bullish narrative for AI remains strong.
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