The rapid sales on Monday in The Markets is a reminder not only what was the driving force of the Taurus market so far, but also what investors expect in 2025. it is all about large technology profits.
The new developments from the Chinese artificial intelligence company Deepseek caused a defeat as it led to the investor’s interests in competing with fermentation in the artificial intelligence space of NVIDIA (NVDA) and other large technology names that led to a temporary stop in the American AI trade.
NVIDIA has decreased more than 16 %. Meanwhile, the colleague of “Seven” Seven “Microsoft” (MSFT), Alphabet (Googl, Googl), and Tesla (TSLA) are all 2 % or more. Broadcom (AVGO), another big player in artificial intelligence space, has decreased more than 17 %.
“When the expectations are high, one of the skeptical address can be expelled from its axis,” wrote Cali Cali Cox, chief strategy for wealth management in Ritolz, on Monday. “This is exactly what we see today.”
The rapid growth of Big Tech’s profit was a danger to the market that strategists talk about for more than a year. With index assessments near the highest levels of nodes, the 10 largest stocks containing approximately 40 % of the S&P 500 index, strategists have argued that the rapid gathering in shares is increasing on thin ice.
“You have a lot of focus in one field of the market – this was the dominant market of artificial intelligence – and suddenly it brings some uncertainty to this market, the initial response is the sale first and the questions later asked,” Trueist said the co -investment official Keith Lehrner told Yahoo Finance.
Unlike other risks such as high interest rates or sticky inflation, there was no clear story about the reason for the collapse of an exceptional large technology profit growth. Currently, the new artificial intelligence model of Deepseek appears to be a tangible reason for investors to ask whether the high profits expectations will really follow.
“The biggest risk is the one we are not talking about,” said Lenerner. “Everyone believes that it is a tariff and China. As you know, what we discover is (Deepseek) was not on the Bingo card for anyone.”
In 2024, seven great profits surpassed the rest of the S&P 500 index by 30 percentage points, for each search from Goldman Sachs. Although this margin is expected to slow down next year, which has caused some to invite some to expand the stock market revenues, the growth of large technology profits remains a major column of the bull market thesis.
The “Seven Magnificent Seven” shares are expected to grow by 21.7 % in the fourth quarter compared to the 9.7 % profit growth expected in 493 other technical shares. The growth rate is expected to slow on an annual basis for “Seven Magnificent Seven” in the first quarter before accelerating the profit growth on an annual basis by more than 24 % in the third quarter.