Apple and Nvidia Face Profit Taking as Investors Reassess AI Growth Expectations

Two of the market’s biggest winners, Apple and Nvidia, faced renewed selling pressure this week as traders rotated out of high flying tech names, questioning whether the AI driven growth story has reached a short term plateau.

Profit Taking After an Explosive Run

Both Apple and Nvidia have surged in 2025, leading major indices to record highs. But after months of relentless inflows, investors are locking in profits and repositioning into sectors less exposed to tech volatility.

Analysts say this is a cooling phase, not a collapse a breather after the most aggressive rally since the post COVID boom.

“Nvidia is still a leader in AI hardware, but expectations became unrealistic,” said a JPMorgan equity strategist. “Even great companies can’t grow at that speed forever.”

AI Euphoria Meets Earnings Reality

The latest round of earnings calls showed strong but decelerating growth in chip and device demand. Nvidia’s data center segment remains robust, yet some customers are delaying upgrades amid higher financing costs. Apple’s latest product cycle, including AI integrated devices, has been well received but its services revenue missed some forecasts, raising questions about saturation in key markets.

Traders point to signs that AI enthusiasm is shifting from hardware to software meaning capital may move toward cloud and enterprise names rather than GPU manufacturers.

Broader Market Context

The pullback in mega cap techs has weighed on overall market sentiment, with several ETFs seeing net outflows for the first time in months. Still, analysts stress that valuations while stretched remain far from bubble territory.

Short term corrections, they argue, may help reset sentiment before another leg higher if macro conditions stabilize.