[MARKET ANALYSIS] : Tech leads stocks lower into NVIDIA results, UBS remains constructive on the sector

Price Action:

• 
  APAC stocks traded with a negative bias throughout much of the session; ASX 200 -0.3%, Nikkei 225 -0.2%, Hang Seng -0.6% - the Shanghai Comp managed to stay afloat. A tentative risk tone which comes after hefty pressure seen Stateside, in the prior session; in Europe, the STOXX 600 fell circa 1.8% to close at a fresh one-month low – the worst day since August. To contextualise the move, the Nasdaq Cash is now roughly 6.4% off its ATH, with losses largely driven by pressure across the Tech sector. Elsewhere, Bitcoin has slipped just under 30% from its ATH, erasing all of its gains made in 2025.

Tech weakness leading the downside:

• 
  There is not one specific catalyst which sparked the bearish bias over the past few trading session, but rather an accumulation of several factors hitting sentiment, including; 1) Tech woes, 2) US-China AI battle, 3) anticipation of poor US data after the government reopened, 4) Poor private labour indicators.


• Delving deeper, the Tech woes have been the driving force for the pressure across the equities complex in recent sessions. Seemingly begun last week, on AI valuation woes and this theme has continued to play out – and then further exacerbated by NVIDIA stake sales by Softbank and Peter Theil’s hedge fund ahead of the Co’s results on Wednesday.


• On Tuesday 18th November, Rothschild downgraded Microsoft to Neutral from Buy and lowered its PT to USD 500 – analysts cited lower earnings expectations; it also downgraded Amazon to Neutral from Buy and kept its PT unchanged at 250. Rothschild thinks investors are giving Cos. "too much benefit of the doubt," pricing in the heavy spending as if it carried cloud 1.0-level returns, "even though there is no clear path back to those economics”. It is interesting to note that the latest AI-deal between mega-caps Microsoft, NVIDIA and Anthropic, worth billions, failed to lift sentiment for equities as it has done so in the past. Analysts at GS suggest that the latest weeks of selling pressure in the Tech sector, pointing to a “somewhat cleaner positioning into” NVIDIA earnings – after months of outperformance. Elsewhere, analysts at UBS believe that “robust capex investment, accelerating strategic partnerships, and surging product launches will drive sustained demand for AI compute”.
  


• In the past weeks it is also worth highlighting some notable commentary from OpenAI, where it seemingly sought US government backing to fund its USD 1tln expansion – Altman later pushed back on this, by stating that “we do not have or want government guarantees for Open AI data centres”. On the US-China battle, NVIDIA CEO Huang said China “will win the AI race”, but he later clarified that he said China was only "nanoseconds behind" the US and that the US needed to accelerate its efforts.

Other factors:

• Other key factors for the recent dip in sentiment includes woes heading into a string of US data releases, after the Government reopened last week. Recent private labour indicators have pointed towards a deteriorating employment situation, and this could very much be confirmed by September’s NFP report – set to be released on Thursday.

NVIDIA:

• Back to Tech, and more specifically heavyweight NVIDIA – the Co. is expected to report Q3 results on Wednesday at 21:20GMT, conference call thereafter from 22:00GMT. Expectations are for Revenue to print at USD 54bln (+50% Y/Y), EPS USD 1.17 (+12% Q/Q); Data Centre Revenue 48.58bln (+18% Q/Q). Focus will be on Blackwell and supply chain updates, commentary surrounding China and how the Co. attempts to navigate the current political US-China environment, and guidance heading into Q4. A full preview will be available on the Newsquawk headline feed later today.

19 Nov 2025 - 08:15- EquitiesData- Source: Newsquawk