We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Wall of Worry: Why Markets are Primed for a Spring Surge
Key Takeaways
The AI 'funding crisis' is misunderstood by investors.
Market breath is at record highs.
Growth engines like NVIDIA are trading at reasonable valuations.
Despite boiling geopolitical tensions, tariff uncertainty, and AI funding fears, five data points suggest that markets are primed for a rally:
AI Spending & Funding Concerns are Overdone
Artificial intelligence is the leading industry on Wall Street by leaps and bounds. AI companies have the fastest growth, the most robust stock performance, and the most robust forward growth expectations. However, most AI stocks have declined in 2026 amid concerns about AI spending and funding.
First, let’s talk about AI spending concerns. Although AI-related CAPEX spending was already huge, ‘hyperscalers’ are telling us it’s going to get even bigger. CAPEX spending guidance from hyperscalers Microsoft ((MSFT - Free Report) ),Alphabet ((GOOGL - Free Report) ), and Amazon ((AMZN - Free Report) ) is expected to grow to a mind-blowing $515 billion this year and ~600 billion next year. The spending expectations from these tech juggernauts suggest that spending concerns are very misunderstood and overblown. Such massive spending will reverberate through the economy, boosting adjacent industries such as energy and construction. Read more about NVIDIA’s upcoming earnings here.
For instance, Texas Pacific Land Corporation ((TPL - Free Report) ) is rising on Monday after an extremely bullish upgrade and price target hike from KeyBanc. KeyBanc analyst Tim Rezvan raised his price target from $350 to $659, a rare 88% increase (the stock currently trades at ~$525). Rezvan highlighted the company’s potential outside of its core oil and gas businesses. He believes TPL can benefit from its massive land ownership (~900k acres), which has the potential to attract data centers and, by extension, power and water infrastructure projects. Additionally, Rezvan believes TPL can benefit from carbon capture, hydrogen, and sand mining projects that are beyond the scope of its legacy oil and gas businesses. Finally, the KeyBanc analyst believes that Wall Street is undervaluing the company because it only sees it as a traditional oil and gas stock – not a beneficiary of the AI revolution.
Meanwhile, X user @meeijer made an astute observation about AI infrastructure stocks CoreWeave ((CRWV - Free Report) ) and Nebius Group ((NBIS - Free Report) ). Friday, a headline surfaced that CRWV would not be able to secure a $4B loan from Owl Capital. Both companies fell nearly 10% on the news. However, just a couple of hours later, both CoreWeave and Owl denied that the financing was in jeopardy. In other words, investors are overly concerned about AI funding, causing unjustified selling.
Seasonality Turns Higher in March
Based on historical seasonality patterns, selling pressure in the month of February is the expectation, not the exception. However, historical data suggests that stocks tend to bottom in March and rally into the summer.
Image Source: EquityClock.com
Market Breadth is Broadening
The net difference between the cumulative advancing and declining stocks on the NYSE just printed a fresh all-time high. In other words, market participation is broadening.
Image Source: Stockcharts.com, TrendLabs
Sentiment is Overwhelmingly Bearish
Although the major indices are within a stone’s throw of all-time highs, market sentiment is bearish. According to the CNN Fear/Greed Index, market sentiment has plunged from ‘Greed’ in January to ‘Fear’ in February.
Image Source: CNN
Valuations are Reasonable
Despite the fear, uncertainty, and doubt about AI spending and valuations, NVDIA ((NVDA - Free Report) ) and other leading stocks have cheap valuations. For instance, NVDIA trades at just a 46 P/E. NVDA’s valuation is very reasonable given its scorching-hot growth rates. Read more about NVDA’s upcoming earnings here.
Image Source: Zacks Investment Research
Bottom Line
Ultimately, the current market malaise appears to be a classic case of noise overshadowing signal. While retail sentiment has dipped and seasonal weakness has occurred, the fundamental pillars of the bull market remain intact.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
The Wall of Worry: Why Markets are Primed for a Spring Surge
Key Takeaways
Despite boiling geopolitical tensions, tariff uncertainty, and AI funding fears, five data points suggest that markets are primed for a rally:
AI Spending & Funding Concerns are Overdone
Artificial intelligence is the leading industry on Wall Street by leaps and bounds. AI companies have the fastest growth, the most robust stock performance, and the most robust forward growth expectations. However, most AI stocks have declined in 2026 amid concerns about AI spending and funding.
First, let’s talk about AI spending concerns. Although AI-related CAPEX spending was already huge, ‘hyperscalers’ are telling us it’s going to get even bigger. CAPEX spending guidance from hyperscalers Microsoft ((MSFT - Free Report) ), Alphabet ((GOOGL - Free Report) ), and Amazon ((AMZN - Free Report) ) is expected to grow to a mind-blowing $515 billion this year and ~600 billion next year. The spending expectations from these tech juggernauts suggest that spending concerns are very misunderstood and overblown. Such massive spending will reverberate through the economy, boosting adjacent industries such as energy and construction. Read more about NVIDIA’s upcoming earnings here.
Image Source: Carson Investment Research, Bloomberg, @sonusvarghese
For instance, Texas Pacific Land Corporation ((TPL - Free Report) ) is rising on Monday after an extremely bullish upgrade and price target hike from KeyBanc. KeyBanc analyst Tim Rezvan raised his price target from $350 to $659, a rare 88% increase (the stock currently trades at ~$525). Rezvan highlighted the company’s potential outside of its core oil and gas businesses. He believes TPL can benefit from its massive land ownership (~900k acres), which has the potential to attract data centers and, by extension, power and water infrastructure projects. Additionally, Rezvan believes TPL can benefit from carbon capture, hydrogen, and sand mining projects that are beyond the scope of its legacy oil and gas businesses. Finally, the KeyBanc analyst believes that Wall Street is undervaluing the company because it only sees it as a traditional oil and gas stock – not a beneficiary of the AI revolution.
Meanwhile, X user @meeijer made an astute observation about AI infrastructure stocks CoreWeave ((CRWV - Free Report) ) and Nebius Group ((NBIS - Free Report) ). Friday, a headline surfaced that CRWV would not be able to secure a $4B loan from Owl Capital. Both companies fell nearly 10% on the news. However, just a couple of hours later, both CoreWeave and Owl denied that the financing was in jeopardy. In other words, investors are overly concerned about AI funding, causing unjustified selling.
Seasonality Turns Higher in March
Based on historical seasonality patterns, selling pressure in the month of February is the expectation, not the exception. However, historical data suggests that stocks tend to bottom in March and rally into the summer.
Image Source: EquityClock.com
Market Breadth is Broadening
The net difference between the cumulative advancing and declining stocks on the NYSE just printed a fresh all-time high. In other words, market participation is broadening.
Image Source: Stockcharts.com, TrendLabs
Sentiment is Overwhelmingly Bearish
Although the major indices are within a stone’s throw of all-time highs, market sentiment is bearish. According to the CNN Fear/Greed Index, market sentiment has plunged from ‘Greed’ in January to ‘Fear’ in February.
Image Source: CNN
Valuations are Reasonable
Despite the fear, uncertainty, and doubt about AI spending and valuations, NVDIA ((NVDA - Free Report) ) and other leading stocks have cheap valuations. For instance, NVDIA trades at just a 46 P/E. NVDA’s valuation is very reasonable given its scorching-hot growth rates. Read more about NVDA’s upcoming earnings here.
Image Source: Zacks Investment Research
Bottom Line
Ultimately, the current market malaise appears to be a classic case of noise overshadowing signal. While retail sentiment has dipped and seasonal weakness has occurred, the fundamental pillars of the bull market remain intact.