Nvidia Sneezed, AI ETFs Shivered — Is This The Correction Investors Wanted?

Core Viewpoint - Despite recent declines in tech stocks, particularly in AI-related companies, experts advise long-term investors to remain calm and not panic-sell, especially regarding NVIDIA Corp [1][2] Group 1: Market Trends and ETF Performance - The recent decline in AI stocks is attributed to routine profit-taking rather than a fundamental issue within the AI sector, following a shift in expectations for a rate cut and negative sentiment from a prolonged U.S. government shutdown [2][4] - Major ETFs heavily invested in AI companies, such as Invesco QQQ Trust and Vanguard Information Technology Index Fund ETF, experienced significant drops, with QQQ down 5%, VGT down over 6%, SOXX down 8%, and SMH down more than 7% in the past week [3][4] - Equal-weight ETFs like Invesco S&P 500 Equal Weight ETF and Direxion NASDAQ-100 Equal Weighted Index Shares are considered safer options, as they reduce the impact of large-cap stocks and allow smaller AI-related companies to have more influence [5] Group 2: Investment Opportunities - The current market pullback presents opportunities in overlooked sectors, particularly in software and cybersecurity, which are seen as the "second wave" of AI investment [6][7] - Specific ETFs such as iShares Expanded Tech-Software Sector ETF, WisdomTree Cloud Computing Fund, and First Trust NASDAQ Cybersecurity ETF are highlighted as potential investment avenues [7] - ServiceNow Inc, down about 20% this year, is identified as an attractive long-term option within the AI-related stock space [7] Group 3: Earnings and Market Resilience - Despite market fluctuations, earnings remain strong, with S&P 500 net margins reaching a 25-year high of 14.2% and 82% of companies exceeding EPS expectations, indicating robust earnings growth of 13.1% for the third quarter [8] Group 4: Upcoming Catalysts - NVIDIA's upcoming earnings report on November 19 is anticipated to be a critical factor in determining whether the current market turbulence will subside or worsen, particularly for ETFs heavily invested in NVIDIA [10]