Sou Hu Cai Jing·2025-10-31 08:37Core Viewpoint - The recent significant drop in tech stocks, particularly the Nasdaq and companies like Meta and Nvidia, is attributed to market reactions to earnings reports and one-time expenses rather than a fundamental decline in the tech sector itself [1][3]. Group 1: Tech Sector Analysis - Meta's sharp decline of 11% was not due to poor performance, as its revenue growth reached a new high since last year, but rather due to a one-time expense of over $15.9 billion related to Trump's "Great Beautiful Plan" [3]. - Microsoft reported a loss of $3.1 billion from its investment in OpenAI, leading to immediate negative market reactions [3]. - Major tech companies, including Google, Meta, and Microsoft, collectively invested $78 billion in AI last quarter, an increase of 89% year-over-year, indicating sustained demand for AI despite market volatility [3][4]. Group 2: Market Dynamics - The recent market shift saw a rise in bank and healthcare stocks, suggesting a natural adjustment rather than a complete rejection of tech stocks [4]. - Even with Meta's significant drop, Google's better-than-expected earnings led to a rise in its stock, indicating that the market is selectively rewarding tech companies with strong performance [4]. Group 3: Broader Economic Context - The recent U.S.-China talks led to a temporary rise in U.S. rare earth miners, but analysts caution that this is a "tactical ceasefire" rather than a long-term agreement, emphasizing the importance of industry resilience [5]. - The Federal Reserve's recent decision to lower interest rates by 25 basis points and halt balance sheet reduction is seen as a short-term measure, with potential for future policy reversals due to ongoing economic challenges [5]. Group 4: Investment Strategy - Long-term investors should focus on tech companies with substantial AI investments and solid earnings, like Google, viewing current price drops as potential buying opportunities [6]. - In the value stock sector, banks and healthcare companies with strong earnings should be monitored, but investors are advised to wait for pullbacks before entering positions [6]. - Companies lacking core competitive advantages should be avoided, as they are more susceptible to rapid declines [6].