The S&P 500 Index saw a 23% increase in 2024, largely driven by major technology companies. However, as profit growth slows, these tech giants may find it challenging to maintain market dominance in 2025. Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management, highlighted that the deceleration in profits could surprise investors who are banking on high double-digit returns. She suggested that the notion of these companies trading together as a cohesive market leader might be unsettled in 2025.
Shalett also pointed out that some of the profit expectations factored into stock prices might be overly ambitious, indicating a potential reevaluation of these projections in the coming year.
