Big Tech is back in S&P 500 driver’s seat as profit engines hum

The same technology giants that helped withdraw the S&P 500 index to the edge of the bear market in April giving recovery in the United States some legs.

NVIDIA Corp put a bow on a better profit season than expected for large technology last week by providing strong revenue expectations, although the United States restricts its chips sales in China. With the return of NVIDIA and Microsoft Corp to the threshold of standard levels, merchants are betting that the group is ready to raise the wider market.

“I feel really good about the technology that comes out of this profit season,” said Brett Iwing, chief strategy expert at First Franklin Financial Services. “There is still more gas in this tank.”

The S& P 500 index is located in the range of 4 % of its record in February, where a lot of reversal is fueling by reducing tensions between the United States and its commercial partners, as well as the results of the large technology that showed demand for things such as cloud computing services, software, electronic devices and digital advertisements are still sound even like threatening high matches on sales sales.

Tesla Inc. 56 % since the standard increased on April 8, while NVIDIA and Microsoft gained 40 % and 30 %, respectively.

As a result, the Bloomberg scale for the so-called seven wonderful shares, NVIDIA, Microsoft, Tesla, and Apple Inc. , And alphabet inc. , And Amazon.com Inc. And Meta Platforms Inc.-It exceeds a third of the S&P index. The regiment is responsible for nearly half of the S&P 500 rally from the bottom of April, according to the data collected by Bloomberg.

Despite the strong performance, the group still fails the S&P 500 index for this year – which is rare in the past decade. Apple and Amazon shares, which face greater risks of definitions resulting from imported products, weighing the regiment and fails to the total market.

“The purchase of technology decline will be the subject throughout the year,” said Eng. “There is still a lot of money on the margin and it must be placed at work.”

The risk of recovery

Definitions and other Trump policies are still a big tightness in the market. On Friday, the standard sank more than 1 % after Trump accused China of violating an agreement with the United States to reduce the definitions and the news report that the United States is planning to set wider restrictions on the country’s technology sector. S&P 500 managed to recover most of these losses by the end of the day.

Another obstacle will be significant assessments of technology. The great Seven Seven scale is priced at Bloomberg with expected profits 30 times, according to the data collected by Bloomberg. Meanwhile, S&P 500 is trading in 21 times of expected profits for the next 12 months, up from 18 times in April and more than 18.6 times over the past decade.

Barry Nab, the administrative partner in the total economy of iRonsides, said he warned of the rich assessments of Big Tech, although the group looks attractive from a basic perspective. He “suffers from a modest weight loss” in this sector and has a relatively more exposure to industries, materials, energy and financial data in anticipation of the restoration of capital spending in the second half of the year.

“The weight gain on technology here ranges from recklessness, because you have a large percentage of your wallet in this sector, and this makes you vulnerable.”

The market catalyst

However, Keith Lerner consulting services, see the Big Tech technology that leads the broader market in the last half of 2025 as spending on artificial smart computing continues.

Meta platforms raised their forecast for capital expenses this year, and Microsoft said it plans to increase spending in their next financial year, which reduces fears that companies have retracted these expenses after two years of identity.

“Our point of view is that profits may remain more flat, but it is likely that it has a lower one side than we believed to be heading to the profit season,” said Lenner, a head of investment in Truest and the chief market strategy.

The amazing seven profit estimates in 2025 have remained fixed in the past two months. The group is expected to achieve 15 % growth, which is almost in line with analysts’ expectations before the reports season begins in mid -April and the expected expansion of the S&P 500, according to the data collected by Bloomberg Intelligence.

“Investors will be returned towards these names with secular growth,” said Lenner. Tech “this can be a catalyst later to see the market actually re -accelerate later in the year.”

This story was originally shown on Fortune.com

Don’t miss more hot News like this! Click here to discover the latest in Business news!

2025-06-01 21:27:00