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London CNN Business  — 

The Nasdaq has soared to record highs in recent weeks, significantly outpacing gains on both the S&P 500 and the Dow.

The big question on Wall Street: Has the tech-heavy index — driven by spectacular stock gains for Amazon (AMZN), Apple (AAPL) and Microsoft (MSFT) — shot up too high, too fast?

This week could provide some clues as tech earnings for the April-to-June period kick off. IBM (IBM) is due to report results on Monday, followed by Microsoft on Wednesday and Intel (INTC) on Thursday.

Daniel Ives of Wedbush Securities remains extremely bullish on tech stocks, noting the huge benefits of their exposure to cloud services as millions more people continue to work from home.

See here: Microsoft’s cloud services revenue skyrocketed 39% during the first three months of 2020, compared to the same period in 2019. CEO Satya Nadella pointed to “two years’ worth of digital transformation in two months.”

In a recent note to clients, Ives predicted that tech stocks could rally another 20% to 30% before peaking. But that will require another quarter of strong growth in a tough economic environment.

Investors are increasingly nervous about the meteoric rise in tech shares. According to a survey conducted by Bank of America this month, a record 74% of fund mangers said that tech stocks are a “crowded” trade, indicating they see the sector as overvalued and may start looking for opportunities elsewhere.

The CBOE Nasdaq Volatility Index, which tracks expectations of volatility for the Nasdaq 100 index, has also started to tick up again since early June.

And the warning signs are there. The Nasdaq Composite shed 2% last Monday in a surprisingly large move following California’s decision to close indoor spaces, such as bars, restaurants and movie theaters.

The global battle over tech could cost $3.5 trillion

As tensions between Washington and Beijing continue to escalate, Wall Street is warning that a new tech Cold War could cost the industry trillions of dollars.

The latest: In a recent note to clients, Deutsche Bank tech strategist Apjit Walia said that supply and demand disruptions, along with the construction of a “tech wall” that forces companies to create two sets of standards to operate in the United States and China, could cost companies $3.5 trillion over the next five years.

The loss of Chinese demand for Western tech products is particularly concerning, Walia said. China accounts for 13% of tech sector revenues globally, adding up to roughly $730 billion per year, he noted. Moving supply chains out of China, and efforts to comply with vastly different regulatory systems in China and the United States, would also prove costly.

These tensions are reflected in the fight over TikTok. The United States is considering banning the popular video app, which is owned by Beijing-based startup ByteDance.

In the hot seat: TikTok has been repeatedly attacked by US politicians who say it is a threat to national security because of its ties to China, alleging that the company could be compelled to divulge information to the Chinese Communist Party.

TikTok has taken pains to distance itself from China. It recently hired an American CEO and argues that it stores Americans’ data on US-based servers.

My CNN Business colleague Brian Fung reports that the Trump administration’s success in cracking down on Huawei — which the United Kingdom last week banned from its 5G networks, reversing a previous decision — could embolden the president to take on TikTok next.

Watch this space: While the US administration would be well within its rights to bar downloads on federal government devices, it’s less clear how it could force states or the private sector to follow suit. But it may not need to. At least one company, Wells Fargo, has already told employees not to install TikTok on company devices.

Up next

Monday: Halliburton (HAL) and IBM (IBM) earnings

Tuesday: Coca-Cola (KO), Lockheed Martin (LMT), Philip Morris (PM), UBS (UBS), Snap (SNAP) and Texas Instruments (TXN) earnings

Wednesday: Existing US home sales; United Airlines (UAL), Biogen (BIIB), Chipotle (CMG), Microsoft (MSFT), Tesla (TSLA) and Whirlpool (WHR) earnings

Thursday: Initial US unemployment claims; Germany consumer confidence; American Airlines (AAL), Hershey (HSY), Kimberly-Clark (KMB), Twitter (TWTR), Intel (INTC) and Mattel (MAT) earnings

Friday: New US home sales; American Express (AXP), Honeywell (HON) and Verizon (VZ) earnings