3 Ways To Profit With Big Tech Back In The Driver's Seat

Forbes5 hours ago

Big Tech is back in the driver's seat! The technology sector has been leading the market rally off the early-April lows – with sizable double-digit gains piling up. Here are three ways you can profit, courtesy of top MoneyShow experts.
Mike Larson MoneyShow.com
Big Tech is SO back. Again.
Ever since the stock market bottomed out on April 7, we've seen most (though not ALL) of the biggest technology stocks rocket higher. All but two are outperforming smaller-capitalization stocks, as represented by the iShares Russell 2000 ETF (IWM), as well as the SPDR S&P 500 ETF Trust (SPY) -- as you can see in this MoneyShow Chart of the Day.
Big Tech SPY IWM
Nvidia Corp. (NVDA) is the Big Tech name with the most post-'Liberation Day' juice – up 58%. Tesla Inc. (TSLA) isn't far behind, with a 40.4% rally. Next are Microsoft Corp. (MSFT) and Meta Platforms Inc. (META), both nipping at Tesla's heels with gains of 37.8% and 37.3%. Only Apple Inc. (AAPL) and Alphabet Inc. (GOOGL) are notably lagging (+11.2% and +16.4%, respectively).
What's behind the resumption of the Big Tech trade – a trade that has periodically popped back up over the past year or two? A few things...
First, investors are boosting bets on earlier Federal Reserve rate cuts. Lower rates help boost growth-stock multiples.
Second, concerns about tariff and trade policy have eased. President Trump has dialed backed some of his most punitive tariffs – and signaled a willingness to keep negotiating with trade partners. That could prevent some of the worst-case tech supply chain scenarios from playing out.
Third, FOMO is back in play. Investors got too bearish during the declines, didn't get on board early enough in the subsequent rally, and they're now dog-piling into old favorites to play catch up.
Add it all up and you have a tech sector that is leading again – and driving the averages to new highs. From where I sit, that's bullish…and underscores why my 'Be (Selectively) Bold' approach (still) looks like the right one here.
Joe Markman Digital Creators & Consumers
It's happening in real-time, yet most investors remain completely oblivious. The 'it' is the Artificial Intelligence (AI) revolution, the greatest productivity accelerant since electricity. Let's talk about what it means for Microsoft Corp. (MSFT).
According to a report on Bloomberg, MSFT is planning to cut thousands of jobs in its Xbox gaming division. These cuts will be in addition to the 6,000 employees fired in May at LinkedIn and other Microsoft subsidiaries.
This is a sticky subject. There is going to be massive disruption. But it is a wonderful time to be a Microsoft shareholder.
Microsoft Corp. (MSFT)
Analysts scoffed at Magnificent Seven corporate leaders when they kept increasing capital expenditures for AI infrastructure. Research suggested that the companies would never earn a return on that invested capital because they couldn't imagine a large-enough business to justify the investment. When Satya Nadella, Microsoft's chief executive, invested $10 billion in OpenAI two years ago, Wall Street analysts thought he had lost his mind. There was no demand for another Siri, they wrote.
What the analysts missed then is that ChatGPT, OpenAI's flagship product, isn't Siri. ChatGPT can write software code, while Siri can barely play songs on Apple Music. Apple Inc.'s (AAPL) digital assistant was never going to succeed, mostly due to corporate culture. The iPhone maker is a hardware company. But executives at the other Mag-7 companies live and breathe software. They understood immediately what ChatGPT was, and they went all-in on AI.
Make no mistake: layoffs at the biggest software companies are about to become much more common. This is because large portions of software employees can be replaced with AI. In the same way that electricity enabled mechanized, automated production that required fewer workers to achieve greater output, AI software is going to hollow out large parts of white-collar work. These changes will happen swiftly and persistently, as they are now occurring at Microsoft.
In the past, foundational technology shifts have led to greater employment as new sectors and businesses were born. Pessimists said the Internet was going to shutter the global economy. More than two decades later, it turns out that connecting the entire world to a network led to millions of new jobs in the digital economy and employment in business verticals that previously did not exist.
The flip side for investors is that productivity means increased profits. When headcounts are lower, more money flows to the bottom line. None of this is being reflected currently in share price valuations. Expect this to change in the second half of 2025 as hyperscalers talk about doing more with less, much to the surprise of the Wall Street analyst community.
Recommended Action: Buy MSFT.
George Gilder Gilder's Technology Report
The market capitalization leaderboard for semiconductors continues to highlight the divergence between IP ownership and physical production. US firms dominate the top rankings — Nvidia Corp. (NVDA) at $2.476 trillion, Broadcom Inc. (AVGO) at $804 billion — but that masks how irreplaceable the manufacturing layer has become in a geopolitically fractured world.
Key fabrication and tooling players like Taiwan Semiconductor Manufacturing Co. (TSM), Samsung, and ASML Holding NV (ASML) remain undervalued by comparison. This valuation gap reflects investor focus on scalability and software leverage.
Top 10 Semiconductors
In today's semiconductor market, location defines exposure, not necessarily strength. Nvidia, Broadcom, and Advanced Micro Devices Inc. (AMD) — all US-headquartered — are rewarded for their innovation, commanding premium valuations and massive market capitalizations. But their products are inseparable from the Asian manufacturing ecosystem. TSMC, Samsung, and ASML remain irreplaceable at the physical layer of chip production.
Tariffs, meanwhile, distort incentives. They penalize final assembly hubs like China without reshoring critical stages such as wafer fabrication or back-end packaging. This imbalance creates investment opportunities — and risks.
US design-centric firms gain margin leverage, but companies controlling equipment, lithography, or memory — like ASML, Applied Materials, and SK Hynix — are the real backbone of global production.
Investors should pay close attention to companies bridging these two worlds: Those that own irreplaceable manufacturing capacity and are structurally tied to Western markets. ASML and TSM remain critical infrastructure. Applied Materials Inc. (AMAT), Lam Research Corp. (LRCX), and KLA Corp. (KLAC) control the tools that keep fabs alive.
Nvidia and Broadcom may lead the stock market — but it's the factory floor that decides who can actually deliver.

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U.S., China announce a trade agreement - again. Here's what it means

Associated Press

17 minutes ago

Associated Press

U.S., China announce a trade agreement - again. Here's what it means

WASHINGTON (AP) — The U.S. and China have reached an agreement — again — to deescalate trade tensions. But details are scarce, and the latest pact leaves major issues between the world's two biggest economies unresolved. President Donald Trump said late Thursday that a deal with China had been signed 'the other day.'' China's Commerce Ministry confirmed Friday that some type of arrangement had been reached but offered few details about it. Sudden shifts and a lack of clarity have been hallmarks of Trump's trade policy since he returned to the White House determined to overturn a global trading system that he says is unfair to the United States and its workers. He's been engaged for months in a battle with China that has mostly revealed how much pain the two countries can inflict on each other. And he's racing against a July 8 deadline to reach deals with other major U.S. trading partners. The uncertainty over his dealmaking and the cost of the tariffs, which are paid by U.S. importers and usually passed on to consumers, have raised worries about the outlook for the U.S. economy. And although analysts welcomed the apparent easing of tensions with China, they also warned that the issues dividing Washington and Beijing are unlikely to be resolved anytime soon. What did the two sides agree to? U.S. Treasury Secretary Scott Bessent said Friday that the Chinese had agreed to make it easier for American firms to acquire Chinese magnets and rare earth minerals critical for manufacturing and microchip production. Beijing had slowed exports of the materials amid a bitter trade dispute with the Trump administration. Without explicitly mentioning U.S. access to rare earths, the Chinese Commerce Ministry said that 'China will, in accordance with the law, review and approve eligible export applications for controlled items. In turn, the United States will lift a series of restrictive measures it had imposed on China.'' The Chinese have complained about U.S. controls on exports of advanced U.S. technology to China. But the ministry statement did not specifically say whether the United States planned to ease or lift those controls. In his interview on Fox Business Network's 'Mornings with Maria,' Bessent mentioned that the United States had earlier imposed 'countermeasures'' against China and 'had held back some vital supplies for them.'' 'What we're seeing here is a de-escalation under President Trump's leadership,'' Bessent said, without spelling out what concessions the United States had made or whether they involved America's export controls. Jeff Moon, a trade official in the Obama administration who now runs the China Moon Strategies consultancy, wondered why Trump hadn't disclosed details of the agreement two days after it had been reached. 'Silence regarding the terms suggests that there is less substance to the deal than the Trump Administration implies,″ said Moon, who also served as a diplomat in China. Wait. This sounds familiar. How did we get here? The agreement that emerged Thursday and Friday builds on a 'framework'' that Trump announced June 11 after two days of high-level U.S.-China talks in London. Then, he announced, China had agreed to ease restrictions on rare earths. In return, the United States said it would stop seeking to revoke the visas of Chinese students on U.S. college campuses. And last month, after another meeting in Geneva, the two countries had agreed to dramatically reduce massive taxes they'd slapped on each other's products, which had reached as high as 145% against China and 125% against the U.S. Those triple-digit tariffs threatened to effectively end trade between the United States and China and caused a frightening sell-off in financial markets. In Geneva, the two countries agreed to back off and keep talking: America's tariffs went back down to a still-high 30% and China's to 10%. That led to the talks in London earlier this month and to this week's announcement. Where does all this leave U.S.-China economic relations? If nothing else, the two countries are trying to ratchet down tensions after demonstrating how much they can hurt each other. 'The U.S. and China appear to be easing the chokeholds they had on each other's economies through export controls on computer chips and rare earth minerals, respectively,' said Eswar Prasad, professor of trade policy at Cornell University. 'This is a positive step but a far cry from signaling prospects of a substantial de-escalation of tariffs and other trade hostilities.'' Trump launched a trade war with China in his first term, imposing tariffs on most Chinese goods in a dispute over China's attempts to supplant U.S. technological supremacy. Trump's trade team charged that China was unfairly subsidizing its own tech companies, forcing U.S. and other foreign companies to hand over sensitive technology in exchange for access to the Chinese market and even engaging outright theft of trade secrets. The squabbling and negotiating of the past few months appear to have done little to resolve Washington's complaints about unfair Chinese trade practices and America's massive trade deficit with China, which came to $262 billion last year. This week's agreement 'includes absolutely nothing related to the U.S.'s concerns regarding China's trade surplus or non-market behavior,'' said Scott Kennedy of the Center for Strategic and International Studies. 'If the two sides can implement these elements of the ceasefire, then they could begin negotiations on issues which generated the initial escalation in tensions in the first place.'' What is happening with Trump's other tariffs? Since returning to the White House in January, Trump has made aggressive use of tariffs. In addition to his levies on China, he has imposed 'baseline'' 10% taxes on imports from every country in the world . And he's announced even higher taxes — so-called reciprocal tariffs ranging from 11% to 50% — on countries with which the United States runs a trade deficit. But after financial markets sank on fears of massive disruption to world trade, Trump suspended the reciprocal levies for 90 days to give countries a chance to negotiate reductions in their barriers to U.S. exports. That pause lasts until July 8. On Friday, Bessent told Fox Business Network that the talks could extend beyond the deadline and be 'wrapped up by Labor Day'' Sept. 1 with 10 to 12 of America's most important trading partners. Trump further played down the July 8 deadline at a White House press conference Friday by noting that negotiations are ongoing but that 'we have 200 countries, you could say 200 countries-plus. You can't do that.' Instead of new trade deals, Trump said his administration would in coming days or weeks send out a letter where 'we're just gonna tell them what they have to pay to do business in the United States.'' Separately, Trump took sudden aim at Canada Friday, saying on social media that he's immediately suspending trade talks with that country over its plan to impose a tax on technology firms next Monday. Trump called Canada's digital services tax 'a direct and blatant attack on our country.' The digital services tax will hit companies like Amazon, Google, Meta, Uber and Airbnb with a 3% levy on revenue from Canadian users. It will apply retroactively, leaving U.S. companies with a $2 billion bill due at the end of the month. ____ AP Writers Didi Tang and Will Weissert in Washington contributed to this report.