Wallstreetcn
2024.04.01 05:55
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The "Seven Sisters" of US stocks have become the "Big Four"

Apple, Tesla, and Google fell behind, while the other four giants contributed to nearly half of the S&P 500 index's growth in the first quarter

As the U.S. stock market closes the first quarter, the trend of technology giants represented by the "Big Seven Sisters" has also shown differentiation. Apple, Google, and Tesla, which used to lead the gains, have fallen behind, leaving only Nvidia, Meta, Microsoft, and Amazon standing strong.

However, the overall market momentum remains unaffected, with the S&P 500 index rising by 10% in the first quarter, highlighting that despite the weakening momentum of tech giants, other industries and individual stocks are emerging, driving the overall market higher.

Apple, Tesla, and Google Falling Behind

The camp of tech giants known as the "Big Seven Sisters" has shown significant differentiation this quarter.

Apple's stock price fell by 11% in the first quarter, while Tesla suffered a heavy blow of nearly 30%. Apple has faced consecutive antitrust sanctions from the EU and U.S. regulatory agencies in the past month, with many investors questioning Apple's response to the AI revolution. Tesla, on the other hand, is facing challenges such as intensified competition in electric vehicles, slowing sales growth, and slow progress in the vision of autonomous driving taxis.

Google's parent company, Alphabet, has also been in a slump, with a lackluster performance in the first two months, although showing some improvement in the last three weeks, ending the quarter with a modest 8% increase.

In contrast, Nvidia, Meta, Microsoft, and Amazon, these four tech giants, have continued to rise in the first quarter, leading the market. Analysts have referred to them as the new "Four Giants".

Among them, Nvidia's stock price surged by over 80% due to the massive demand for GPUs catalyzed by the AI boom; Meta has improved advertising accuracy through investments in AI, leading to a soaring stock price; Microsoft has long dominated the U.S. market value with businesses like cloud computing; and Amazon's profitability has also seen a significant increase.

Expansion of U.S. Stock Market Gains

The market has been able to expand its gains without relying on traditional tech leaders, reflecting capital flowing into a wider range of industries and companies.

Apart from real estate, all sectors of the S&P 500 index saw varying degrees of growth in the first quarter, with small-cap stocks, industrial, and financial stocks performing particularly well. This also confirms the market's belief that the U.S. economy is successfully soft-landing in the coming quarters, with the Federal Reserve expected to shift to rate cuts at the appropriate time. The AI technology revolution has also been an undeniable driver of market enthusiasm.

However, in the short term, the Four Giants are still expected to dominate market performance. Howard Silverblatt, an analyst at S&P Dow Jones Indices, told the media that the Four Giants contributed nearly half of the S&P 500 index's gains in the first quarter.

Analysts believe that as the current valuations of the Four Giants are relatively reasonable, there is still room for further upside in the future. At the same time, the market is also paying attention to the rising potential of other industries, with funds gradually flowing out of tech stocks with high valuations and into other sectors.

Investors will closely monitor important economic data such as manufacturing data and employment reports in the coming days to clarify the overall trend of the U.S. economy and evaluate the future direction of the stock market. The degree of differentiation within tech stocks and the extent of capital flowing into other industries may become key factors affecting whether the overall market can continue its upward trend