Happy Friday, traders…

Jeff here.

Yesterday, momentum and growth stocks got absolutely demolished. No high-flying tech stock was safe. 

We saw sharp selloffs across some of the most widely traded names in the market, with traders suddenly pulling back from what had been a seemingly unstoppable rally.

Now, a pullback in momentum stocks isn’t unusual. That’s why I recently warned you about this bubble popping.

These companies riding waves of speculation are prone to exaggerated moves in both directions. 

It all comes back to Newton’s Third Law of Motion: What goes up, must come down…

But today felt different. This wasn’t just a few names getting minorly clipped after an extended run. This was a broad, aggressive selloff in some of the biggest winners of the past year. 

And that has me looking ahead to the earnings for one particular stock: Nvidia.

Make no mistake, Nvidia’s upcoming earnings are the next major test for the entire market.

With that in mind, let’s investigate yesterday’s momentum implosion — and design a plan for what’s around the corner…

5 Growth Stocks That Got Destroyed

First, let’s break down what happened yesterday. 

Big names in AI, tech, and growth — stocks that have led this market higher — were sold off indiscriminately. 

The companies that have been the biggest investor darlings are starting to correct in a meaningful way:

• Palantir Technologies Inc. (NYSE: PLTR): Down 10% yesterday, and down 25% from its highs. Investors are growing concerned about potential defense budget cuts, which could impact Palantir’s government contracts — one of its biggest revenue sources.
• Tesla Inc. (NASDAQ: TSLA): The once-unstoppable EV and AI leader fell more than 6% today, now more than 25% down from its December highs. The market seems to be losing patience with slowing sales growth, intensifying competition.
• Reddit Inc. (NYSE: RDDT): The social media platform was hit hard post-earnings, dropping 25% in a week, as investors reassessed its valuation post-IPO. Growth is solid, but concerns over profitability and ad revenue sustainability are weighing on the stock.
• Tempus AI Inc. (NASDAQ: TEM): The AI healthcare company saw its shares slide 9% after analysts warned of slowing growth in AI-driven diagnostics and precision medicine. The broader AI selloff isn’t helping either.
• Robinhood Markets Inc. (NASDAQ: HOOD): The retail trading platform sank another 7% yesterday, giving back nearly all of its post-earnings gains from last week. Even with a blowout quarter, analysts are raising concerns about the company’s ability to continue its growth trajectory. 

What’s driving this? A few things…

1. Valuation concerns. Many of these names have been trading at sky-high multiples, and today’s action suggests that investors are starting to second-guess the prices they’ve been paying.
2. Earnings expectations. We’re in the middle of earnings season, and a few recent reports have raised red flags. While some companies have posted solid results, guidance has been mixed.
3. Economic worries. Retail sales in January came in weaker than expected, and Walmart just issued cautious guidance, pointing to potential softness in consumer spending. If that slows, the entire market could feel the pain.

Why This Matters for Nvidia

Now, let’s talk about the elephant in the room: Nvidia.

Nvidia has been the king of the AI trade. The stock has soared over 1,300% in the past two years, making it one of the biggest winners in the entire market. But with great gains come great expectations. And that’s where things get tricky.

Nvidia reports earnings on February 26, and analysts are expecting a monster quarter. Revenue is projected to hit $38 billion, up 72% year-over-year — numbers that would have been unthinkable just a few years ago.

But the market is reacting to what’s coming next.

A few key things to watch:

1. AI growth expectations. Nvidia has been the undisputed leader in AI chips, but competition is heating up. Companies like DeepSeek in China are developing their own AI chips, and supply chain disruptions could slow future growth.
2. Stock momentum. Despite its massive run-up, Nvidia stock has been trading sideways recently, closing today at $139.23. That suggests that traders are waiting to see the earnings report before making their next move.
3. The broader market shift. If investors are rotating out of momentum stocks, that could spell trouble for Nvidia — even if earnings are strong.

Could Nvidia’s Earnings Spark a Bigger Selloff?

Here’s the key question: Will Nvidia deliver a “good enough” quarter to keep the momentum alive?

It’s less about the numbers and more about the reaction from the market. 

If Nvidia beats expectations but issues conservative guidance, the stock could sell off just like other momentum names today. Traders who were expecting blowout numbers could take profits, triggering a broader pullback in AI stocks. 

This is the way I’m leaning. I think Nvidia earnings will potentially rock the markets lower and introduce the real effects of the Chinese DeepSeek competition. 

On the other hand, if Nvidia smashes expectations and raises guidance, it could reignite the AI trade and push the stock to new highs.

No one knows exactly how this is gonna play out. The key is to be prepared…

How to Prepare for the Big Moves Ahead

So, how can we make sure we’re ready for anything that might happen next?

Pay attention. Volatility is coming. If today’s selloff in momentum stocks was a warning shot, Nvidia’s earnings could be the main event. 

Expect big swings — both before and after the report.

What happened today was significant. When momentum stocks start selling off in unison, that’s not just random noise — that’s a major trend reversal. 

And Nvidia is now at the center of it all.

Its earnings report on February 26 could make or break the everything bubble. Join me on February 24 (to design a game plan for the report) and February 26 (to break down the numbers and the market’s reaction).

Click here to be ready for Nvidia’s earnings!

Stay tuned. More big moves are coming,

Jeff Zananiri

P.S. In the past two weeks, my GAMMA Code system gave us multiple 100%+ setups…*

But if you want to start getting in on these trades before they take off, there’s only one place to start…

TOMORROW, February 22 at 4:00 p.m. EST, the great Danny Phee is hosting a LIVE WORKSHOP to reveal the top GAMMA setups for next week.

Let AI help you find triple-digit trades — Click here to reserve your seat!

*Past performance does not indicate future results