獅山巡禮
投資雜談
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Prior bubbles show the current hype trade should have room to run higher in both price and valuation.
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Technology stocks keep pushing the SP 500 to record highs and many on Wall Street don't see that trend stopping anytime soon.
In a note to clients on Friday, Bank of America Global Research chief investment strategist Michael Hartnett writes how the Magnificent 7 tech stocks-Apple, Alphabet _GOOGL -0.27..., Microsoft MSFT-0.38%V Amazon AMZN +0.01%A Meta META -0.50%Y, Tesla and Nvidia-have
"more to go" and it's time to position for a
"bubble." Using the Magnificent 7 as a proxy, Hartnett says that prior bubbles show the current hype trade should have room to run higher in both price and valuation.
The Mag 7 have gained 225% since March
2023 and currently trade at 39 times trailing 12 month earnings, Hartnett says. Analyzing 10 equity bubbles since 1900, including the Nifty Fifty, the dot-com bubble, and the 2021 tech rally, Hartnett finds that bubbles typically gain
244% and trade at valuations as high as 58
times trailing 12 month earnings.
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It isn't just history backing the case for large-cap technology stocks to keep soaring higher.
Data Trek Research Co-Founder Jessica Rabe says that when replacing Tesla with Broadcom
AVGO -0.05% the market's tech leaders have
seen far greater earnings estimates growth over the past 90 days than the SP 500 itself.
In that period, earnings estimates for the group have risen 4.2% on average for the fourth quarter and 6.1% for the full year 2026. That compares to just 0.8% and 1.4%, respectively, for the SP 500.
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Big Tech Earnings Estimates
Outpace the SP 500
Earnings estimates revisions over the past 90 days have risen significantly more for large tech stocks than the benchmark index.
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This helps explain why the Roundhill Magnificent Seven ETF has doubled the performance of the SP 500 over the past three months.
"These strong fundamentals should enable
U.S. big tech to drive the SP higher through year-end and also supports their (and the index's) elevated valuations," Rabe writes in a note to clients.
Those accelerating earnings have brought increased spending from tech companies seeking to build out Al infrastructure, a key tailwind for Al chip stalwarts like Nvidia and Broadcom. Wells Fargo chief equity strategist Ohsung Kwon says it's likely still the "early innings "of Al spending.
While Al spending has increased to a level that is contributing to U.S. economic growth, it doesn't yet match prior tech innovations.
Kwon's research shows tech spending contributed 2% of GDP in the second quarter of 2025. This falls short of the 2.6% seen during the personal computer boom of the 1980s and the 2.9% seen during the internet bubble of the late 1990s and early 2000s.
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Kwon, who projects the SP 500 will hit 7,200 by the end of 2026, says there is "froth" in today's market but as long as spending continues to ramp up the bull market will roll on.
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"[Thel music stops when the Al capex stops," Kwon writes in a Sept. 9 note to clients. "Enjoy the party."
The Mag Seven are leading
An index that tracks Apple, Alphabet, Microsoft, Amazon, Meta, Tesla and Nvidia has?outperformed the SP 500 over the past three months.
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The string of bullish calls on tech comes at an important point for the macroeconomic backdrop too. On Wednesday, the Federal Reserve cut interest rates for the first time in
2025. The median projection among Fed officials reflects two more quarter of a percentage point cuts this year.
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Julian Emanuel, who leads the equity, derivatives, and quantitative strategy team at Evercore ISI, says that since 1970 the Nasdaq Composite COMP +0.72%A has gained 13.6% in the 12 months after the Fed cuts interest rates for the first time. In a research slide titled
"Nowhere to Go But Up- Fomo Has Started," Emanuel says there will be pullbacks on the path to his 2026 year-end SP 500 target of 1,750. But he recommends being a buyer of those dips.
"The key is to be in position to buy weakness, not sell it, and keep both
greed and fear out of the equation," Emanuel writes
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