Name: Tracking the tech trades troubles
Uploaded: 2025-11-17T14:41:37.007Z
Duration: 5 min 47 s
Description: Frank Cappelleri, Founder & President of CappThesis, and Sarah Kunst, Managing Director at Cleo Capital, assess the tech pullback, warn about stretched valuations in Tesla and Palantir, and note Nvidia’s strength amid rising competition.

Frank Cappelleri, Founder & President of CappThesis, and Sarah Kunst, Managing Director at Cleo Capital, assess the tech pullback, warn about stretched valuations in Tesla and Palantir, and note Nvidia’s strength amid rising competition.

Several leading technology stocks, such as NVIDIA, Tesla, Palantir, Broadcom, and Amazon, have fallen between 2% and 8%, prompting concerns about the sustainability of recent gains in the sector. Market analysts Frank Cavallari and Sarah Coons highlighted that the pullback is linked to high valuations, particularly among AI-focused companies, and noted that while past declines have often been followed by rebounds, the risk of a more significant downturn remains if momentum does not return.

Tesla and Palantir were identified as especially vulnerable due to their elevated price-to-earnings ratios, and NVIDIA was singled out as a key indicator for the broader market. While NVIDIA’s stock has shown resilience above its 200-day moving average, experts cautioned that weakening demand and rising competition could challenge its future performance, with the coming year potentially bringing further volatility for tech stocks.

Tracking the tech trade's troubles

Big moves in some of the top weighted stocks for the week. NVIDIA. Tesla. Palantir. Broadcom. Amazon. All down between anywhere from 2 to 8 percent as you can see there in that graphic. So what's behind the move. And have we fallen too far too fast. Let's bring in Frank Cavallari founder and CEO over a cap thesis. He's also a CNBC pro contributor. Also with us is Sarah Coons the managing director at Clio Capital. We're going to have a kind of more roundtable conversation about this because we'll have varying viewpoints as to how this tech AI trade is playing out. But Frank we're going to start with you as we take a look at that NASDAQ large cap 100 trade. We've seen it now decline below some key moving averages that some traders watch. What exactly do the charts tell you about just how significant the pullback has been in context. Thanks a lot for having me. Well it's really not about what the index does. Attract us down there. It's about the rebound efforts because we can tell going all the way back to October 2022 and the X is up a lot. But how many times has it undercut this line. Right. Every time we've seen a bounce back sometimes take you longer than others. So we want to see here is not only a rebound but prevent this from turning into a bearish pattern breakdown. And that's one thing that's been missing from this entire thing. Look at the S&P 500 and the X whatever it is. We've seen bearish patterns forming consolidation phases take place. What we've seen big come in every time preventing these from happening. So we're not seeing even that pullback even play out right now to the degree that it has in the past over the course of the last few years. Not yet. But that obviously is a concern especially after a move that we've seen since the April lows. All right. So Sarah with your part in this whole discussion let's talk about from a from a markets perspective in your mind. Have you seen damage enough or is that damage still to come based upon these valuation concerns. This pullback has been driven by A.I. to the downside. Absolutely. Look I don't have a fancy chart like Frank but I can tell you that you know when you look at Palantir you look at Tesla. Yes they're they're dipping right now. But when you look at what that P.E. ratio is in the triple digits where they're you know 10 to 20 X what a lot of their competitors are. That's a tough sell. Even if they've had a few percentage points shaved off. Now that trade as well though is something where those valuation concerns have played out more markedly very near term over the last week but have been at play for maybe about a few weeks now at this point with some large cap names. What are the ones that you think are the most susceptible to any more further downside based upon those valuation concerns. I do think it's the Palantir's and Tesla's specifically of the world where no matter how you feel about you know the management team the core product their future sales product sort of prospects they're just incredibly incredibly highly priced for where their revenues at. I would put core weave in that bucket. I think that's another one where we've seen some damage this week. These are tough sells if you're concerned about the fundamentals which until the last couple of weeks I've sort of been alone in that. OK let's bring Frank back to the discussion here. Sarah highlights Tesla. Let's talk about the Tesla chart in your mind here and what it's done so far and what you think it could be doing. As you can tell this looks like a classic double top right here. Right. And currently down below that. And we just talked about the end. It's much more clear in Tesla. So now we can tell this is not really straight line. This is around the 350 level. This is what you call an air pocket. So if we don't have a demand come in much more momentum can continue to the downside until it gets to at least that area. So that 350 levels one to watch here. The other name if you could mind clearing that that I want to bring up here in the discussion is NVIDIA because it has become rightfully so or wrongfully so the poster child if you will for just what's happening in the market overall certainly within the trade. What does the chart tell you about the NVIDIA situation as it's developing right now. Because it doesn't seem to be pulling back nearly as much as it could be given this downdraft. That's true. I think a lot of reason for that of course is reporting very soon. And so I never make a trade recommendation based on what the report says. But it's very important to understand the structure of NVIDIA. And this is the 200 day moving average year. As we can tell it's above it right now. That's about one hundred fifty dollars a share. But there are times in the past where it's reclaimed the line very well and then led to years of upside action. So the concern is that that doesn't happen. So we just reclaimed it again now after a few months and we see that 200 day moving average eventually undercut once more after only spending a few months above it. That could tell us that maybe momentum is finally slowing in the video. Obviously that would have a huge effect on the market in general. Now Sarah the NVIDIA story is big for you as well. Just how much can you read into NVIDIA driving the broader market sentiment. We already know it mathematically. It is the biggest influence on key sectors in the market. I like Jensen. I think that NVIDIA you know is a company that has a has a long history and a long future. But at the same time the reality is that some of those competitors are catching up. We see from names like Taiwan Semiconductor that the demand is going down. We know that you know the enterprise adoption is largely not quite there yet. And so there are some serious questions about who's actually going to buy these chips and at what scale. The China question is very much still out there. And so I like NVIDIA. I think it's a little bit expensive right now and I I don't think it's something you sell. But I also think you you have to think about what the next kind of year looks like for it which might not be its best year in recent years.

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