Nasdaq 100 Slides as China’s Apple Probe and Google’s Earnings Miss Shake Market Sentiment

Tech Stocks Slide as China Targets Apple and Google—Nvidia Bucks the Trend

Tech stocks are under heavy selling pressure as China ramps up regulatory scrutiny on U.S. giants, with Apple and Alphabet taking the biggest hits. Apple fell nearly 3% in premarket trading following reports of a possible probe into its App Store policies, while Alphabet tumbled 9% after weak cloud earnings and a costly AI expansion plan. Meanwhile, Nvidia is slightly higher in premarket trading, though risks remain as China weighs new investigations into U.S. chipmakers.

Apple’s China Risk Escalates—Regulators Turn Up the Heat

Apple shares fell 2.6% in premarket trading as China’s State Administration for Market Regulation (SAMR) considers an investigation into its App Store fees and restrictions on third-party payment services. If launched, the probe could create additional hurdles for Apple in one of its most crucial markets, where competition from domestic players like Huawei is already eroding sales.

Apple’s revenue from Greater China dropped 11% year-over-year in the December quarter, and a regulatory crackdown could accelerate the decline. The company has already faced global scrutiny over its App Store policies, with the EU forcing it to open its ecosystem under the Digital Markets Act. If China follows suit, Apple’s ability to control its ecosystem—and its lucrative in-app purchase revenue—could be at risk.

Alphabet’s AI Spending Spree Alarms Investors

Alphabet’s stock plunged 9% in extended trading after reporting disappointing cloud revenue and announcing a massive $75 billion capital expenditure plan for AI expansion—well above the $58 billion expected by Wall Street.

Google Cloud revenue rose 30% to $11.96 billion in the fourth quarter but fell short of estimates, raising concerns about slowing growth. The AI-driven spending surge also rattled investors, especially as China’s DeepSeek has demonstrated a lower-cost approach to AI development. Alphabet’s aggressive investment strategy may take time to deliver returns, leaving the stock vulnerable to near-term pressure.

Nvidia Holds Gains—But Can It Last?

Unlike Apple and Alphabet, Nvidia edged up 0.25% in premarket trading. However, the stock faces risks as China considers fresh investigations into U.S. chipmakers, including Nvidia and Intel.

China is already scrutinizing Nvidia over its 2019 Mellanox acquisition, and any expansion of regulatory pressure could hurt the company’s prospects in its second-largest market. Nvidia is also navigating U.S. export restrictions on AI chips, which could limit its ability to sell advanced semiconductors to Chinese customers. While the stock is up for now, any escalation in regulatory actions could shift sentiment quickly.

Market Outlook: More Weakness Ahead for Tech

The immediate reaction suggests a bearish short-term outlook for major tech stocks, with Apple and Alphabet under heavy selling pressure. Nvidia is holding premarket gains, but its longer-term risks remain tied to China’s regulatory stance and potential chip restrictions.

With Nasdaq 100 futures down 1.03% premarket, traders should brace for continued volatility. Any further escalation from China—or additional earnings disappointments—could extend the selling pressure across the tech sector.

More Information in our Economic Calendar.