Big Tech stocks continue to drop, but investors are yet to make significant purchases. Experts discuss future trends amidst political and economic uncertainty.
Falling Prices for Leading Tech Companies
The so-called "Magnificent Seven"—Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla—are now trading at 26 times forward earnings, the lowest since September. However, even after the decline, valuations have not hit the lows of 2018 and 2022. Analyst Violeta Todorova expressed that despite more attractive current valuations, the situation might worsen.
Impact of Policy Changes on the Market
Recent policy changes, including Trump's economic policies, have significantly impacted investor sentiment. Big Tech stocks, which recently reached record highs amid expectations of economic growth and regulatory relief, are now facing substantial declines. Investors are pulling back from riskier assets, notably affecting Meta, Amazon, and Tesla.
Liquidity Issues and Market Volatility
Despite Nasdaq 100's attempts to recover in recent trading sessions, each attempt has lacked durability. A primary concern is market liquidity. There is an increase in options trading volumes, particularly with short expiry terms, contributing to additional volatility. Strategists predict that the macroeconomic and geopolitical conditions will influence the situation until stabilization is reached.
Major tech companies continue to face pressure from investors who are cautious due to international and economic uncertainties. Attention is focused on the Federal Reserve's next moves and the overall economic growth trajectory as artificial intelligence influence grows.
