Tech giants face tough task to sustain second half stock rally
BNN Bloomberg
The world’s largest technology stocks drove a banner first half for the S&P 500. The question for the rest of the year is whether their strength continues.
Wall Street has tilted toward the tech sector to a historic degree, raising the stakes should the AI-fueled rally falter. Valuations are stretched, while earnings growth is poised to slow from here.
That adds to uncertainty for investors betting that Big Tech’s rally will continue, according to Lisa Shalett, chief investment officer at Morgan Stanley’s wealth management unit, who warns of “stretched momentum, weak breadth and complacency” in the market.
The S&P 500 Index has risen 17 per cent this year, and two-thirds of that advance rests of the shoulders of just six names: Nvidia Corp., Microsoft Corp., Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., and Apple Inc. Nvidia, the AI-focused chipmaker that has soared 159 per cent this year, accounts for nearly 30 per cent of the S&P’s advance in 2024, the highest contribution for a market leader in at least a decade.
