Alpine Macro, an economic analyst, said that the big seven technology stocks have peaked in the short-term sell-off and are expected to rise or stabilize.
It is noteworthy that US stocks reaped their highest profits last week since October 2023, and this came in the form of a rebound and recovery from Black Monday when the US stock exchange suffered huge losses as a result of recession, weak transfer, and the belief of some investors that stocks reached their peak.
Shares of the Magnificent 7, which account for 33% of the S&P 500, fell sharply, leading analysts to believe that their prices are now oversold in the short term.
Alpine Macro’s latest analysis provides a detailed overview of these stocks across various indices. The company noted that technical and capital allocation indicators show signs of overselling, suggesting a possible recovery or at least stability in the near term.
They noted that this is particularly important given the ‘skyrocketing’ in market capitalization and stock prices over the past decade.
The investment research firm’s analysis also highlights divergence in fundamentals such as sales, margins and cash flows, which remained strong for Magnificent 7 shares compared to the rest of the market.
This divergence is said to raise questions about the sustainability of these trends, with Alpine Macro suggesting that a moderate rebound may be on the horizon.
Evaluation remains a major concern. Although the current downturn may make these stocks seem less expensive, Alpine Macro warns that they may still be ‘just expensive’ rather than being irrationally priced.
The report stresses the importance of comparing this period of market concentration with previous ones, noting that although fundamentals vary, the dominance of a few stocks is a recurring theme in the US stock markets.
Read also:Breaking news: Tassie is approaching an important resistance. Salik causes this arrow to collapse!
MSFT: Is this leading stock facing new challenges?
With stock valuations soaring in 2024, many investors feel uncomfortable investing more money in stocks. Sure, there are always opportunities in the stock market – but it seems harder to find them now than it was a year ago.
Don’t know where you should invest now? Get investment ideas from the best investment portfolios in the world to seize the best opportunities.
Investing.com offers you ProPicks which is a premium tool consisting of 6 model portfolios that identify the best stocks that investors can buy at the moment. For example, ProPicks found that there are 9 neglected stocks that have jumped more than 25% this year alone.
New stocks that have achieved monthly rallies could deliver tremendous returns in the coming years.
Is MSFT one of them?
