Source: Zhitong Finance
UBS will$Apple (AAPL.US)$,$Amazon (AMZN.US)$,$Alphabet-A (GOOGL.US)$,$Meta Platforms (META.US)$,$Microsoft (MSFT.US)$und$NVIDIA (NVDA.US)$The six tech giants' stocks were downgraded from “increased holdings” to “neutral” on the grounds that profit momentum was reversed.
From a low in January 2023 to a peak in April 2024, the shares of the six tech giants rose 117%. A group of strategists led by Jonathan Golub said that since that high point, the stock prices of these companies have fallen 8%.
These stocks and$Tesla (TSLA.US)$They have all retreated from recent highs, with the EV maker down about 50% (compared to the peak on July 18, 2023) and Nvidia down about 20% (compared to the March 25 peak).
According to analysts, TECH+ includes all technology divisions, discretionary internet retail, interactive media and services, interactive home entertainment, and movies and entertainment$Netflix (NFLX.US)$.
Analysts pointed out that due to a reversal in earnings momentum, they downgraded the ratings of the top six tech companies.
Golub and his team said, “Investors attribute the rise in large stocks to positive sentiment and the impact of artificial intelligence; however, our research shows that surging profit momentum (changes in forward growth estimates) is driving this upward trend,”
However, according to UBS analysts, this momentum is collapsing, and the earnings per share growth rate of the six largest companies are expected to fall from 42% to 16% next year, while other tech+ and non-tech+ stocks will accelerate growth.
Analysts pointed out that their six major ratings were not based on extended valuations or doubts about artificial intelligence. However, this is an acknowledgement of the tough competition and cyclical pressures these stocks face. These forces do not apply to other TECH+ companies or other segments of the market.
Damo believes that the performance of big tech giants will become a “savior” for US stocks
Stock strategists at major Wall Street commercial banks are in huge disagreement about whether American companies can achieve strong profit growth this year.
Michael Wilson, a well-known Wall Street bear and chief stock strategist from Morgan Stanley, predicts the overall earnings per share growth trend of US companies — that is$S&P 500 Index (.SPX.US)$The overall earnings per share of the constituent companies will improve. In terms of market expectations, the performance growth rate of the “Big Five Tech Giants” is expected to reach 60%, which may be the core driving force leading US stocks out of the recent quagmire.
The stock strategy team led by Michael Wilson of Morgan Stanley said that as the US economy strengthens, the profit growth rate of US companies is expected to improve markedly in 2024 and 2025. This is also a “big short” Michael Wilson rarely optimistic about earnings per share since 2023.
Regarding the latest outlook on earnings expectations for US stocks, Wilson emphasized that with the support of new order data, the recovery data from the US business activity survey “confirms the continued growth trend of future profits.”
edit/lambor