The AI-fueled boom

US tech stocks reached new record highs during 2025, driven by investor optimism around artificial intelligence and expectations of US economic growth. The Nasdaq 100 index rose about 22%, largely supported by Nvidia, which continued its strong performance to become the first company to surpass a $5 trillion market capitalization after its shares increased 40% since the beginning of the year.

Corporate investments in AI surged, with major companies such as Nvidia, OpenAI, Microsoft, Amazon, and Meta entering strategic agreements and spending around $360 billion this year to develop AI infrastructure. This indicates expectations for further growth in the technology and AI sectors in the coming period.

First signs of concern & warnings

In November, signs of fear and caution began to appear among investors. Tech stocks declined approximately 4.5% after Nvidia, AMD, and Palantir shares dropped due to profit-taking. Major banks have issued warnings about a possible market correction of 10–20% over the next two years after some stocks reached record levels. This pushed the VIX index up by around 10%, signaling that fear levels are rising in the market.

Between bubble and correction around AI Stocks Rally: Legitimate debate or overblown?

Analysts and stocks investors are divided over whether these declines are a natural correction within the uptrend or a bubble in the tech sector, similar to the previous internet bubble when stock prices detached from the companies’ actual earnings.

Trump expects tech stocks to continue rising and set new records, while the Federal Reserve chairman emphasized that companies are making real profits and does not foresee a bubble like the one in the past. Even Goldman Sachs and Morgan Stanley confirmed that these declines do not indicate fear or crisis, although they acknowledged high valuations. They noted that this period represents a correction and a cooling-off of rallies before continuing the uptrend.

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The future of Tech stocks | Nasdaq 100 Forecast: Optimism vs. bubble

Tech stocks face a critical test today between continuing their rise and setting new record highs or the risk of a bubble. If companies investing in AI report actual profits exceeding their investment levels, further gains and new record highs are expected, according to analysts. However, if major tech companies’ profits slow down or investor expectations fall short, the likelihood of a bubble increases, which could negatively impact US stocks, according to analyst forecasts.

The next direction for tech stocks will largely depend on corporate profits and their ability to turn promises into tangible achievements. Additionally, expectations of US Federal Reserve interest rate cuts could positively influence stocks, alongside anticipation of the Supreme Court’s decision on the tariffs imposed by Trump on companies and countries.

Nasdaq 100 analysis: Faces historic resistance at 26,250 points

The Nasdaq has been trading in an uptrend since April 2025 and remains above its 50-day moving average, maintaining levels near 24,800. Currently, analysts are watching whether the Nasdaq can target the psychological and historic resistance at 26,250. If it successfully breaks above and stabilizes, new record levels are expected. However, if trading continues below this level, a limited corrective move within the uptrend may occur, with 24,800 serving as a secondary support level according to analysts expectations.

Figure 1: Nasdaq Index, TradingView