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Trivia: The P/E ratio of QQQ has decreased rather than increased from the beginning of the year until now QQQ tracked P/E ratio: Early 2026 32.3x → Now about 30x NDX expected P/E ratio: Early 2026 27.4x → Now about 23x In other words "This rally is driven by earnings growth, not P/E expansion inflating stock prices" 🔴 While the P/E ratio is contracting, revenue is still growing significantly. The latest quarterly actual revenue of QQQ component stocks: ・Nvidia Data Center 75.2B, +92% → +36B (Q1) ・Alphabet Total Revenue 119.8B, +24% → +23.2B (Q2) ・Microsoft AI Business ARR 37B, +123% → +20.4B ・Meta Total Revenue 60.8B, +28% → +13.3B (Q2) ・Google Cloud 24.8B, +82% → +11.2B (Q2) ・AWS 37.6B, +28% → +8.2B (Q1) This is the confidence behind achieving new highs without P/E expansion. If the P/E ratio expands driven by sentiment, there is potential to go even higher. 🟠 So where will this correction go? Currently, several points worth watching: 1⃣ Margin balance 1.53 trillion, up 51.5% year-over-year 2⃣ Net credit balance −1.06 trillion, historical low (cash buffer depleted) 3⃣ Leveraged ETFs 218 billion, 4.5 times that of 2020 4⃣ CoreWeave CDS 855bp, included in QQQ since 6/22 5⃣ Four cases after peak earnings growth rate, three dropped ≥15% If QQQ falls to $600 within a year, that’s a 19.5% drop from the peak, with historical baseline probability around 40%, and the above five points increase the likelihood somewhat. The chance of falling to 600 is higher than expected. 🟢 Looking longer term, global AI sales (Q1 2026) are 25 billion, with AI depreciation at 21 billion in the same period, leaving a buffer of only 4 billion. The top four QQQ companies (Microsoft, Alphabet, Amazon, Meta) have purchased 433.9 billion in equipment over the past four quarters, which must be amortized over several years: ・Over 6 years → an additional 65–75 billion per year ・Over 4 years → an additional 95–110 billion per year Current annual depreciation is 149 billion; adding this batch will bring it to 220–260 billion annually, an increase of 40–70% at once, and this only counts already purchased equipment—more will be bought next year. Meanwhile, revenue is also increasing, and at a higher rate. Alphabet adds about 93 billion annually, Meta about 53 billion; just these two companies add twice the new depreciation. But some companies are already diverging: Alphabet: Revenue +24%, Operating profit +30%, revenue outpacing costs. Meta: Revenue +28%, Operating profit −8%, costs outpacing revenue. Both are spending heavily; one is still profitable, the other is already being eaten up. The future depends on whether revenue or depreciation grows faster. $QQQ