Lisa Shalett, Chief Investment Officer at Morgan Stanley Wealth Management, highlights that the tech giants driving a 23% rise in the S&P 500 last year may struggle to maintain market dominance due to slowing profit growth. According to Bloomberg data, the "Magnificent Seven"—Nvidia (NVDA), Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Tesla (TSLA), Meta (META), and Microsoft (MSFT, Financial)—are expected to see combined earnings growth of 18% this year, down from last year's anticipated 34%.
Shalett notes that this slowdown in earnings could surprise staunch investors who had bet on robust double-digit growth from these tech stocks. The belief in their market leadership may waver, leading investors to become more selective when purchasing large tech stocks, with individual company performance differences becoming increasingly significant.
