Renewed interest in Mag7 after its decline
Renewed interest in Mag7 after its decline
The Nasdaq Composite is poised to end its longest streak of weekly losses in four years, thanks to renewed investor interest in technology giants that have fallen significantly in price. Amazon's price-to-forward earnings ratio has dropped to 25, a 17-year low. NVIDIA's P/E recently plummeted to its lowest level since the US imposed tariffs in April.
At the end of 2025, the inflated fundamental valuations of the Magnificent Seven companies and fears that they would be unable to generate adequate returns on their colossal investments in AI triggered a rotation in the US stock market. However, if the tech giants continue to spend money on Artificial Intelligence, it means they have it. UBS estimates that Amazon, Meta and Google will invest $360 billion in 2026 to build data centres and other AI-related capital expenditures.
Doubts about the rotation between the U.S. and other stock markets supported the S&P 500. According to the Treasury Department, non-residents invested $1.55 trillion in US securities in 2025. This is more than the 1.18 trillion dollars invested in 2024.
By the FxPro Analyst Team
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