The Markets Still Bullish on Big Tech
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Aug 8, 2025 Strong earnings have pushed US tech giants to new heights, raising questions about future growth potential. Experts discuss the impressive performance of big-cap companies in e-commerce, cloud services, and digital advertising. Despite economic uncertainties and tariff concerns, a cautiously optimistic outlook emerges for the tech sector, especially with advances in artificial intelligence. Insights into market dynamics reveal a divergence in stock performance, highlighting the AI industry's potential impact on upcoming economic indicators.
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Strong Growth & CapEx in Big Tech
- Big tech reported accelerating growth in e-commerce, public cloud, and US digital advertising during Q2 earnings.
- Capital expenditure is rising as the tech sector invests heavily in AI development and infrastructure.
Long-Term AI Growth Perspective
- AI-related stocks like semiconductors surged about 70% since April lows, reflecting a strong run in the theme.
- The AI journey is expected to be multi-year or even decade-long, despite short-term fluctuations.
Tech Sector & Macro Environment
- Tech is moderately sensitive to economic policy and interest rates, benefiting slightly from lower rates.
- If growth cools moderately with potential rate cuts, tech could perform well; however, overly slow growth could pose risks due to cyclicality.