--- title: "Big Tech goes from stock market’s safest bet to biggest question" description: "Big Tech stocks, once the safest bet in the market, are now facing uncertainty as they underperform compared to the S&P 500. Despite a market rebound, companies like Apple, Amazon, and Tesla are down " type: "news" locale: "en" url: "https://longbridge.com/en/news/240756212.md" published_at: "2025-05-19T04:01:34.000Z" --- # Big Tech goes from stock market’s safest bet to biggest question > Big Tech stocks, once the safest bet in the market, are now facing uncertainty as they underperform compared to the S&P 500. Despite a market rebound, companies like Apple, Amazon, and Tesla are down this year, raising questions about their future dominance. While some investors are cautiously optimistic, others warn of potential risks, including economic fluctuations and tariff impacts. The performance of these tech giants is crucial, as they represent a significant portion of the S&P 500's market capitalization, and their recovery could drive the index higher. (May 19): For most of the past decade, a handful of high-flying technology companies have pushed the US stock market to record highs and become cornerstones of investment portfolios. But that has collapsed this year. Despite the S&P 500 Index clawing back into the green for 2025 after being whipsawed by US President Donald Trump’s vacillating trade policies, tech giants like Apple Inc, Alphabet Inc, Amazon.com Inc and Tesla Inc are still down. The Bloomberg Magnificent 7 Index — which includes those companies as well as Meta Platforms Inc, Microsoft Corp and Nvidia Corp — is underperforming the S&P 500, and if that holds through Dec 31, it would make this just the second year in the last 10 where that’s happened. It’s a far cry from last year, when technology and telecommunications stocks both rose more than 35% to lead the S&P 500’s 23% gain. This year, typically lagging groups like industrials, utilities and financials are driving the stock market’s rebound. Whether Big Tech can re-establish its historical dominance in 2025 is the existential question facing investors as they start positioning for the back half of the year. “The market is starting to look back more at individual stocks and companies and financial strength and innovation rather than letting the uncertainty around tariffs and where they may go really dominate the conversation,” said Rick Gardner, the chief investment officer of RGA Investments. “And if you want to start talking about the US economy and you want to start talking about technology, that’s a really bright story.” Gardner has been buying Big Tech stocks for his clients over the past month as the market has rebounded but they have languished. He’s not alone. Signs are emerging that professional traders are increasingly wading back in after slashing equity positioning amid the economic uncertainty triggered by Trump’s global trade war. For example, hedge funds on Tuesday snapped up US equities at the fastest pace since April 9, the day the S&P 500 soared 9.5% after Trump announced his tariff reprieve, according to Goldman Sachs’ prime brokerage desk. Technology stocks were the biggest beneficiaries of the buying. ### Not a good setup The flipside of this optimism is the reality that tech stocks have had a massive runup over the past few years, and with the economy in flux the risk is these shares could have much more room to fall. Betting on Big Tech a decade ago resulted in a gain of 2,179%, compared with 181% for the S&P 500, excluding dividends. “I think we are going to stall out here,” Lisa Shalett, Morgan Stanley’s chief investment officer, said last Friday in an interview with *Bloomberg Surveillance*. “It’s hard to justify the numbers.” Hedge fund manager Michael Burry, who’s famous for his 2008 bet against the housing market that was featured in “*The Big Short*”, bought put options, which profit from price declines, on Nvidia in the first quarter, according to the latest 13F regulatory filing by his firm, Scion Asset Management. However, the filing also added a note that the securities “may serve to hedge long positions which are not eligible to be reported”. That said, the stock market’s big “what if” question is: If those Big Tech laggards start to outperform again, what does that mean for the S&P 500? The Magnificent Seven accounts for about a third of the benchmark’s market capitalisation. So if the mega-tech index, which is down 4.2% for the year compared with a 1.3% rise in the S&P 500, reverses course and takes the lead, how much does the S&P rally? “I think all-time highs are possible,” Gardner said. “I would hate to be the one betting against our technology industry and innovation right now.” He has a point, since the S&P 500 bottomed on April, tech stocks have led the way higher, with the sector rising 31% compared with a 20% gain for the entire index. Of course, not all Big Tech stocks have been underperformers this year. Meta Platforms is up 9.4% to lead the Magnificent Seven, while Microsoft has gained 7.8%. Both have limited exposure to tariffs and posted better-than-expected earnings results. Nvidia, which reports on May 28, is roughly flat for 2025. Betting on a tech rally comes with its own risks. Trump could resume his hard-line approach to tariffs when his 90-day pause ends in July. And the jury is still out on whether a demand shock from his levies will derail the US economic expansion and cause inflation to flare up again. ### Economic fears So far businesses have absorbed most of the costs from Trump’s tariffs, but Walmart Inc said in its earnings report last week that consumers will start to see higher prices soon as it works through inventory and begins to pass on the expense of newer merchandise. Meanwhile, US consumer sentiment is at the second-lowest level on record and inflation expectations are at multi-decade highs, according to the monthly survey by the University of Michigan. While the factors weighing on Big Tech laggards vary, the common challenge most of them face is exposure to China, which has been hit with the highest tariffs by the Trump administration. For instance, the majority of Apple’s most important device, the iPhone, are still mostly made in China, and the country accounted for 17% of its 2024 revenue, according to data compiled by *Bloomberg*. The company earlier this month reported a 2% decline in China sales in its fiscal second quarter, short of analyst expectations. Apple has lost more than US$700 billion (RM3.02 trillion) in market value since closing at a record on Dec 26 and is now worth less than Microsoft and Nvidia. Alphabet, meanwhile, faces mounting concerns about risks to its Google search business from artificial intelligence chatbots like OpenAI’s ChatGPT. Searches on Apple’s Safari web browser fell for the first time in April, an Apple executive said in court testimony last week. Still, hope for equity investors remains. In many ways the most encouraging sign for the stock market has been the S&P 500’s ability to rebound without Big Tech companies leading, according to George Maris, the chief investment officer and global head of equities at Principal Asset Management. “You don’t necessarily need the largest capitalisation securities to do great for a good, constructive market,” he said. “You probably have a healthier market, a healthier, more fundamentally-oriented market, if you have greater participation across the investment universe.” *Uploaded by Tham Yek Lee* ### Related Stocks - [TSLA.US - Tesla](https://longbridge.com/en/quote/TSLA.US.md) - [AMZN.US - Amazon](https://longbridge.com/en/quote/AMZN.US.md) - [AAPL.US - Apple](https://longbridge.com/en/quote/AAPL.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | “硬件防御” 对冲 AI 焦虑，苹果与纳指相关性创 20 年新低 | AI 浪潮下，苹果因未深度卷入军备竞赛，与纳指相关性创 20 年新低，成为科技股动荡中的 “避风港”。在 AI 投资回报存疑及软件业面临颠覆的焦虑中，苹果凭借不易受冲击的硬件生态逆势突围。尽管存在估值偏高及增长放缓压力，其独特的 “AI 中 | [Link](https://longbridge.com/en/news/276301841.md) | | 机构 “最超配” 闪迪，“最低配” 英伟达 | 据摩根士丹利最新的统计：“机构对美国大型科技股的低配程度是 17 年来最大的” 相比 2025 年 Q4 的标普 500 指数权重，“$NVDA 仍然是机构低配程度最大的大型科技股，其次是苹果、微软、亚马逊和博通，而存储巨头闪迪则是 “最超 | [Link](https://longbridge.com/en/news/276289765.md) | | 沃尔玛四季度财报超预期但盈利指引不及预期，CEO 称 “美国低收入家庭只能勉强维持生计” | 沃尔玛 Q4 营收超预期，新财年盈利指引（每股 2.75-2.85 美元）远低于市场预期的 2.96 美元，显示通胀压力下消费者支出不确定性犹存，拖累股价下跌 1.38%。财报印证 K 型” 分化：高收入家庭驱动增长，低收入群体 “钱包吃紧 | [Link](https://longbridge.com/en/news/276398633.md) | | 缺电、缺水、缺人还抢地！美国数据中心建设狂潮面临阻力 | 科技巨头掀起的数据中心基建狂潮正遭遇严峻 “现实墙”：从电网容量、水资源瓶颈到技术工人短缺，执行风险急剧上升。亚马逊等巨头以惊人高价抢地，直接挤压住宅开发，甚至斥资 7 亿美元购入原定建房的地块。这场资源竞赛不仅推高了运营成本，更可能拖累 | [Link](https://longbridge.com/en/news/276290793.md) | | 为 AI 交易 “背书”！OpenAI 正敲定新一轮融资：以 8300 亿美元估值募资高达 1000 亿美元 | OpenAI 正以 8300 亿美元估值推进新一轮融资，目标筹集 1000 亿美元。软银拟领投 300 亿美元，亚马逊和英伟达可能各投 500 亿及 300 亿美元，微软拟投数十亿美元。本轮融资是 OpenAI 自去年秋季公司制改革以来的首 | [Link](https://longbridge.com/en/news/276298180.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.