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UBS says the momentum of the Big Six tech companies is “collapsing.”

UBS says the momentum of the Big Six tech companies is “collapsing.”

“Unfortunately” Paid The largest technology companies are “collapsing,” UBS said in a report today.

The Swiss bank has just downgraded shares of the “big six” companies in the sector – Microsoft, Apple, Amazon, Alphabet, Nvidia and Meta – saying growth in earnings per share for these companies should fall from 42% to 16% over the next year. year.

According to UBS, the downgrade of the “Big 6” rating – from “buy” to “neutral” – is not due to… Ratings Extended or uncertainties about the future of artificial intelligence.

“Rather, it is an acknowledgment of the difficult fundamentals and cyclical forces weighing on these stocks,” the analysts wrote.

Between January and high In April, the shares of these companies rose by 117%. Since the recent peak, stocks have returned 8% on average. The biggest correction was from Nvidia, with a 20% decline.

This was the group that was called the Seven Wonders. The seventh company in the group is Tesla, which has already lost half its value this year and has been excluded from the bloc of major technology companies.

For UBS, the moment will now be for a recovery in other technology stocks and companies in other sectors of the economy.

According to the bank, the growth in earnings per share of companies Technique (excluding the top six companies) is expected to rise from 11.1% in the first quarter of 2024 to 25.5% in the first quarter of 2025.

Companies in other sectors are expected to go from a 3.3% decline to a 19.4% increase.

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Meanwhile, at the Big Six, earnings per share will fall from 42.2% to 15.5%, according to UBS forecasts.

The bank's analysts said investors' exit from technology stocks is likely to have an impact on markets in the short term, but they still have a “constructive” view on US stocks. They maintained their estimate that the S&P 500 would reach 5,400 by the end of the year. This afternoon, the index rose slightly, about 5,000 points.