It was the kind of warning that rattled trading floors on both coasts. On Nov. 4, 2025, Goldman Sachs CEO David Solomon and Morgan Stanley CEO Ted Pick took the stage at a financial summit and delivered a strikingly similar message: The market was due for a pullback. Solomon said a 10% to 20% drawdown over the next year or two was “likely.” Pick called a 10% to 15% decline “healthy.”
The response was immediate. The three major indexes tumbled. The tech-heavy Nasdaq Composite slid 2% in a single day. Analysts reached for their magnifying glasses, combing through Big Tech earnings for any hint of froth.
Three months later, the much-feared correction has yet to materialize.
As of Friday’s close, the Nasdaq sat at 23,031—down just 1.4% from 23,349 on Nov. 4.
That doesn’t mean tech stocks have had an easy ride. Wall Street has entered what can only be described as an era of extreme scrutiny.
Microsoft (MSFT) reported a 60% jump in quarterly profits and 39% growth in its cloud business. Shares fell 10%. Analysts deemed 39% “not fast enough.” Amazon (AMZN) missed earnings estimates by two cents per share—$1.95 actual versus $1.97 expected. The stock was punished with an 8% haircut.
Nvidia (NVDA) knows the feeling. Back in August, the chip giant reported $41.1 billion in data center revenue—$200 million short of the $41.3 billion analysts had baked in. The miss: less than 0.5%. The stock dropped 5% the next day.
Not every company is being treated equally. Meta (META) bucked the trend with a well-received earnings report that sent shares higher. The takeaway is clear: Wall Street isn’t indiscriminately selling tech. It’s putting the sector on probation—and any sign of weakness triggers an immediate penalty.
Here’s the twist: When earnings rise and stock prices don’t, valuations fall.
The average P/E ratio of stocks on the Nasdaq has dropped to 27.45, down from 34 a year ago. According to FactSet, 95% of information technology companies that have reported fourth-quarter earnings so far have beaten expectations.
In a bubble, that kind of performance would send valuations into the stratosphere. Instead, Wall Street is punishing even the smallest missteps. This isn’t euphoria. It’s the anti-bubble.
The CEOs’ predictions may still come true—10% corrections have occurred on average once a year since 1950, and 20% pullbacks every three to five years. But for now, tech stocks have spent three months treading water while earnings quietly climbed.
The verdict? They’re not as expensive as they were.
History says the window for a correction remains open. The bankers gave themselves one to two years. But in the here and now, tech is reporting strong results, taking its lumps, and seeing its multiples cool.
Many investors are waiting for that 10% drop. What if it never comes—or worse, what if stocks start moving higher while they wait? Three months from now, this stretch of calm may not be remembered as the calm before the storm. It may be remembered as the door no one wanted to walk through.
