NEW YORK, Feb 5, 2026, 10:45 EST
- In morning trading, Invesco’s Nasdaq-100 ETF QQQ dropped roughly 1.6%, deepening the tech sector’s retreat.
- Alphabet signaled a steep rise in capital spending for 2026, sparking fresh debate over AI’s payoff.
- Portfolio managers pointed to stretched valuations and concerns over disruption, prompting investors to dial down their risk exposure.
Invesco QQQ Trust (QQQ), the widely traded Nasdaq-100 ETF, dropped roughly 1.6% Thursday morning, following continued selling pressure in big tech after a steep decline the previous day.
The Nasdaq-100 ETF acts as a fast barometer for U.S. growth stocks, often jolting when investors pivot between “risk-on” and “risk-off” stances — moving toward safer holds like cash, bonds, or defensive picks. This week’s action has been propelled by earnings news and fresh arguments about whether AI spending is accelerating too rapidly and excessively.
U.S. stocks slipped Wednesday as worries over AI weighed on tech shares, dragging the Nasdaq down with chip and software names taking hits. “The stock market is having a really hard knowing where to price the stocks,” said Jed Ellerbroek, portfolio manager at Argent Capital. Josh Chastant, a portfolio manager at GuideStone Funds, added, “We’re a bit bearish on software in general.” Reuters
After the close, Alphabet zeroed in on capital expenditures — covering data centers, servers, and network equipment — projecting 2026 spending between $175 billion and $185 billion. CEO Sundar Pichai told analysts, “We are seeing our AI investments and infrastructure drive revenue and growth across the board,” adding later, “We’ve been supply-constrained.” Reuters
TipRanks reported QQQ edged up slightly in Thursday’s pre-market session as investors absorbed Alphabet’s earnings and spending outlook, following a roughly 1.75% drop on Wednesday. The site noted QQQ has slipped 3.62% over the last five trading days but remains up about 15% over the past year. Tipranks
MarketBeat reported a drop of about 1.7% on Wednesday, with QQQ last seen near $605.75 after hitting an intraday low around $600.47. Volume came in above recent averages, suggesting investors were selling decisively rather than just testing the waters. Marketbeat
Swikblog called it a market “selling the good news,” with investors punishing cautious forecasts despite strong headline numbers. The platform also highlighted pressure on high-multiple software stocks—those valued steeply compared to earnings—as AI tools disrupt some established business models. Swikblog
QQQ follows the Nasdaq-100 index, made up of 100 top non-financial firms on Nasdaq. A handful of mega-cap giants dominate its weighting, meaning major swings in Nvidia, Apple, Microsoft, Amazon, and Alphabet can significantly move the fund.
The next move is uncertain. If more mega-caps report results alongside guidance confirming AI spending is converting into revenue and profits, growth stocks could attract money quickly. On the flip side, continued investor doubts over returns—or a surprise in the delayed U.S. jobs data affecting rate bets—could cause sharp pullbacks, given how concentrated the gains have been.
