"Magnificent Seven" Tech Stocks Lose Steam Due to Slowing Growth and High Valuations

With Nvidia's earnings announcement, the Q2 earnings season for US stocks has officially concluded, and the reports for the "Seven Giants" are now all out. Looking at the performance of these giants after their earnings reports, although their growth rate still has an advantage over other companies, the gap has significantly narrowed and no longer meets market expectations. Except for Meta, the other six giants all saw declines on the first trading day after their earnings reports were released.

A survey by BlackRock indicates that the earnings growth of the "Seven Giants" still holds an advantage over the "S&P 493," but this advantage is gradually diminishing. By the fourth quarter of this year, the earnings growth rate for the Seven Giants is expected to be 18%, compared to 17% for the S&P 493, making the difference almost negligible.

With the loss of their growth rate advantage, the high valuations currently enjoyed by the Seven Giants now come into question. It seems that the valuations of the Seven Giants are significantly higher compared to other stocks.