On Schwab Network’s The Watch List today, I spoke with anchor Nicole Petallides about what’s really happening under the surface in tech and AI in early 2026.
The recent pullback in tech doesn’t look like something is breaking IMO…it looks more like digestion. My research shows that after a massive AI-driven rally, some rotation and profit-taking was overdue. But, the fundamentals are still intact: earnings expectations, balance sheets, and demand for AI, cloud, and semiconductors remain very, very real.
What has changed is the tone. Investors have moved from excitement to execution. This is the accountability phase of the AI trade…the Jerry Magquire moment of “Show me the money /revenue,” not just the vision. Companies now have to justify AI capex, demonstrate ROI, and prove they can monetize, not just experiment.
With Big Tech earnings coming up, expectations are high. For Apple, Tesla, Meta, Alphabet, and names like Microsoft and Amazon, this earnings season is a gut check on execution, margins, and discipline. Big promises and AI washing won’t cut it anymore.
We also talked about Nvidia and new China export requirements. Yes, there’s def friction and uncertainty, especially for high-margin chips like the H200. But the bigger picture hasn’t changed. AI demand is still being driven by U.S. hyperscalers and allied markets, not China. As we’ve seen for a while now, geopolitics is now just part of the semiconductor landscape.
Where AI accountability is showing up first is software. AI can’t be bundled in for free anymore. Pricing power, customer adoption, and real revenue matter 100%.
My bottom line: tech isn’t one trade anymore. This is a stock-picker’s market. The companies being rewarded are the ones tying AI directly to customers, contracts, and pricing, not narratives.
Link to the full episode:
youtube.com/watch?v=JuvsvBOJ…
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