3 New Reasons to Be Worried about the Magnificent Seven Stocks
Often hot The magnificent Seven If you trade skids within two months of the year, investors may need to rethink their position before sales pick up.
“We have maintained our view over the past few years, which is that it was wise for US stock managers to be at least the largest magazine in the market. We believe it is wise to lower the exposure. “We’re doing this,” Trivariate Research founder and CEO Adam Parker said in a new memo on Tuesday.
The 7 Grand Trades of Meta (Meta), Amazon (amzn), Google (Goog), apple (aapl), nvidia (NVDA), Microsoft (msft), and Tesla (TSLA) It’s overwhelming these days. One of the Big-Cap technology components, Meta is bringing out the box double-digit profits in line with the sector’s usual strong performance.
Amazon is the only epic seven components that go up a year to match 5.2% songs, slightly outpacing the 3.5% increase on the S&P 500 (^gspc). Alphabet, Apple, Nvidia, Microsoft, and Tesla all decline each year, with an average drop of 3% based on Yahoo Finance calculations. Tesla is the worst performer. 17% off this year.
The reasons for the sellout range from weakening sales (TESLA) to fear that tech companies are spending too much to build AI infrastructure (the remaining epic Seven).
Veteran market expert Parker believes it’s a good time for investors to reduce their exposure for three reasons.
One is unlikely to halt scrutiny of the amount spent on AI CAPEX in 2025 and 2026.
Meta, Microsoft, Amazon and Alphabet are planning to spend a cumulative $325 billion capital expenditure and investments this year, Laura Bratton of Yahoo Finance. Report. This will increase by 46% year-on-year for four high-tech Star Warts.
Amazon alone has seen capital expenditures of $104 billion this year, with previous analysts forecasts well above $80 billion to $85 billion.
Stocks tend to react negatively to these bold spending commitments, Parker notes.
“We’re sure that high capital expenditures will continue to be monitored until investors can better understand the returns of today’s large investments,” Parker says.
Despite the sale, the spectacular 7 stock valuation is also a concern for Parker.
According to Parker’s research, the relative price for multiples of the epic Seven is a premium of 42% compared to the rest of the S&P 500. This is heading towards the top 25-year average range.