By Clint Gharib
Too much of a good thing, a victim of its own success, glut, overkill. These are all phrases that make me think of the stock market in 2025, especially Nvidia and the past two years plus of its published growth. It’s human nature to acclimate; even more so as we get bored from repetition. I mean, I love Sugar Cream Pie; I consider myself an unofficial ambassador for it. But if I eat a piece or two each day for several days, I can’t eat any more of it for a while; not just because of my raised blood pressure, but even I start to grow tired of it. Well, the day after Nvidia released their earnings in November, that’s how the market seemed to me: too much sugar cream pie for too long. Nvidia has made it seem normal to release record-breaking earnings so often that the markets seem to have become bored, even though it was one of the greatest quarterly earnings reports and forecast updates I have ever come across. It, along with many tech stocks, made a big reversal from pre-market gains to high single-digit percentage losses by the end of the day. I know one day does not make a trend, but a reversal often signals a short-term point of inflection. CFRA Research Chief Strategist Sam Stovall wrote that day, “Since the bear market of 2022, the S&P 500 has endured two corrections. However following the bears of 1948, 1973, 1990 and 2007, the S&P 500 weathered from 3 to 5 corrections before finally surrendering to a new bear market. So even if this decline is merely in its infancy, investors should remember that digestions of prior gains are common within the life span of a bull market.” This basically means that markets, no matter how good they are, don’t go straight up. I view the current race for energy to power the seemingly insatiable demands of self-driving cars, plant automation, AI models and machines (and possibly soon personal robots) similar to the infrastructure buildout opportunity after World War II with the rebuilding of Europe and Japan in particular. In the US alone, the proposed project buildouts that have been announced amount to roughly building 20 Denvers. That can be many years, not months or a couple of quarters, but many years of opportunity. I think this is a fact that too many are missing. Spending projections for 2026 from the largest technology companies that provide cloud and data services generally increased from 2025 levels. When sell-offs come, regardless of the size and depth, it can be worrying. This is why I want to remind you of what I wrote in my Update ‘Miles and Miles and Miles’ believing a profit taking was likely: “So when the next big sell-off comes (a sale), remember this idea of so many proposed data-center projects to shop during the sale. I don’t know the future, but I can see ‘miles and miles and miles’ of proposed spending ahead. “
Remember, panic sells set the stage for big rallies. If you’ve been reading my updates, you know I’ve been trying to prepare folks for a real correction. During a sale, you can find great bargains. I have made my career out of this. If you don’t have confidence in your approach to the markets, then contact us for a no obligation review and plan design. I’ve seen the stock markets make many dreams come true, and we love working with clients to chase theirs.
The S&P 500 Index is a widely recognized index including a representative sample of 500 leading companies in leading sectors of the U.S. economy. Indexes are unmanaged. Investors cannot invest directly into indexes. Past performance does not guarantee future results. All historical market data referenced above was obtained from S&P Global (www.spglobal.com). Opinions expressed are that of the author and are not endorsed by the named broker/dealer or its affiliates. All information herein has been prepared solely for informational purposes and should not be considered legal or tax advice. It is not an offer to buy, sell, or a solicitation of an offer to buy or sell any security or instrument to participate in any particular trading strategy and is not intended to provide, & should not be relied on for, tax, legal or accounting advice. You should consult your own tax professional regarding your specific situation. Past performance does not guarantee future results. Certain statements contained within are forward-looking statements including, but not limited to, statements that are predictions of future events, trends, plans or objectives. Undue reliance should not be placed on such statements because, by their nature, they are subject to known and unknown risks and uncertainties. Oxford Retirement Advisors is an independent firm with Securities and Advisory services offered through Madison Avenue Securities, LLC (“MAS”), member FINRA/SIPC and a Registered Investment Advisor. Oxford Retirement Advisors and MAS are not affiliated entities.
