Last week, the Nasdaq fell into a correction for the 70th time in its 52-year history.

The tech-heavy index, which is dominated by megacap "Magnificent Seven" tech stocks and sensitive to interest rate movements, is up about 21% year to date but down 11.9% from its July high. With heightened geopolitical risks and rising Treasury yields, investors are looking for results in stocks that once rode to new heights based on potential — and the Big Tech earnings haven't delivered.

Amazon (AMZN) came in with beats on the top and bottom lines and, while the company reported 12% year-over-year cloud growth, cloud revenue missed analysts' expectations. Similarly, Alphabet (GOOG, GOOGL) reported revenue and EPS beats — but the Google parent missed significantly on cloud revenues, coming in at $8.41 billion compared to analysts' expectations of $8.6 billion.

The exception was Microsoft (MSFT), which beat on the top and bottom lines, winning on cloud with its Azure business and topping expectations for both revenue and growth.

Meanwhile, Tesla (TSLA) badly missed Wall Street estimates. Apple (AAPL), which reports next week, has seen its device sales slow in 2023.

Social media giant Meta (META) beat estimates, but issued conservative Q4 guidance, citing geopolitical unrest — a sentiment that Snap (SNAP) echoed.

"I think the key factor was that we had come to rely on the continuing outperformance of a narrow list of mega-cap technology stocks," Interactive Brokers chief strategist Steve Sosnick told Yahoo Finance. "The good thing about top-heavy market-cap weighted indices is that they perform excellently when their biggest components do well; the bad thing is that they perform very poorly when those stocks don’t."

It's not that these earnings were overall a disappointment, exactly. They were just a dose of reality for a market that had been overly optimistic about AI. Still, Amazon stock is up more than 50% year to date, while Microsoft stock is up nearly 40% in that time frame.

But the macroeconomic environment is getting tougher. Interest rates are high, raising capital costs while making sure-bet investments like CDs increasingly appealing. The consumer is in a tenuous position, as student loan payments have resumed, gas costs are rising, mortgage rates are approaching 8%, and inflation has proven to be sticky.

Additionally, AI, while an eventual tailwind, has not yet been fully monetized in any way, shape, or form. That process is going to take time. Take Oracle (ORCL) — the SaaS heavyweight has no shortage of demand for its AI services but can't get enough Nvidia (NVDA) chips to train and deploy those services.

The story is far from Oracle's alone. Alphabet, Microsoft, and Amazon all do business with Nvidia. The e-commerce giant's CEO Andy Jassy said on its earnings call that the company is looking for ways its cloud service AWS can further monetize its services.

For investors, it depends if you're taking the long-term view or the nearer-term view.

"Long-term Investors shouldn’t pay much attention to these kinds of moves," GraniteShares CEO and founder Will Rhind told Yahoo Finance. "Interest rates are most likely at the top of the cycle, and the economy is still in pretty good shape."

However, in times like these, "it is important for investors to be exposed to quality companies in the market, that are demonstrating growth and sustainability in earnings," said Rhind.

For those looking at the near to medium term, try to stave off instincts to follow the herd blindly.

"When you have a stock like Google go down 10%, it sets off a vicious deleveraging cycle where investors are forced to sell companies they have high conviction in to cover margin calls," Spear Invest founder and CIO Ivana Delevska told Yahoo Finance.

But not all moves are equal; quality companies like Google may be lumped in with the fire sales, but it doesn't mean there are issues with its fundamentals.

Historically, Nasdaq corrections have been tied to some key moments, from the bursting of the dot-com bubble in 2000 to the onset of the COVID-19 pandemic.

"There's a reason why we prefer broad market rallies to narrow ones. In the latter case, the market suffers unless the money rotates from the leaders to the laggards," said Sosnick. "When the money flows out of the leaders and out of the market entirely, then that is a problem. That's some of what we saw this week."

Correction: A previous version of this article incorrectly reported the Nasdaq's year-to-date change. We regret the error.

Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on X, formerly Twitter, at @agarfinks and on LinkedIn.

Click here for the latest technology news that will impact the stock market.

Read the latest financial and business news from Yahoo Finance