Last year $S&P 500 Index (.SPX.US)$ it increased by 23%, with more than half of the rise coming from the thriving Technology giants, but as profit growth slows down, they may still struggle to dominate the market in 2025.

Lisa Shalett, Chief Investment Officer of Morgan Stanley Wealth Management, stated in an interview on Thursday that the slowdown in profits "may surprise those stubborn individuals betting on these very high double-digit returns." The idea that they can trade together as a group and lead the market may waver in 2025.

According to data compiled by Bloomberg Industry Research, the so-called seven major Technology giants — $Alphabet-C (GOOG.US)$ 、$Amazon (AMZN.US)$、 $Apple (AAPL.US)$ 、$Meta Platforms (META.US)$、$Microsoft (MSFT.US)$、$NVIDIA (NVDA.US)$and$Tesla (TSLA.US)$The total revenue is expected to grow by 18% this year, which is lower than the projected 34% for 2024.

This may explain why investors are becoming more cautious about the stock. Bloomberg's seven major Technology Stocks total return Index is expected to decline for the fourth consecutive trading day by at least 1%, marking the longest decline cycle since 2022. The Index has never experienced a drop of 1% or more for five consecutive days.

Shalett anticipates that by 2025, traders will be more cautious when purchasing large Technology Stocks and will begin to distinguish between different stocks to pick out the winners.

She stated: "We are entering a cyclical phase, and the differences in risk exposure among various companies will indeed have an impact. Whether we are discussing the different risk exposures of the AI growth story itself or antitrust risk exposures, recently, we have had to talk about the risk exposure of a strong dollar."

Among Wall Street professionals, Shalett is not the only one who believes that the brilliance of the seven giants is about to come to an end. Savita Subramanian from Bank of America warned that the growth expectations for the seven giants are close to historical highs, and their earnings are expected to slow down. From Goldman Sachs to Citigroup, major firms have urged clients to diversify their investments away from the tech giants.

Shalett believes that the key to 2025 lies in having realistic expectations and picking Stocks among the other components of the S&P 500 Index.

"What we must be cautious of is where some disappointments may occur," she said. "Our best guess is that disappointments will happen in the areas of highest enthusiasm."

Editor/rice