Nvidia’s upcoming Q2 earnings on August 28 could be a crucial catalyst for Big Tech stocks, according to Barclays strategists. Amid rising cross-asset volatility and concerns over AI spending, Nvidia’s results “may hold the fate of the Big Tech vs. rotation trade,” the strategists noted. While AI-related capex has been strong, doubts are growing about when AI revenues will materialize.
Despite a recent 16% drop in European tech stocks, Barclays sees this decline as overdone, prompting them to re-enter the sector with an overweight position. They favour tech’s long-term growth potential over more cyclical sectors like autos.
The sharp market movements have been driven by the unwinding of leveraged positions, particularly in Japanese yen assets. Barclays expects volatility to persist but views the recent selloff as a buying opportunity for long-term investors.
