The Big Tech Stocks Have Cooled Off – is it a Good Time to Accumulate These Stocks?
The US-based tech companies, namely – Nvidia, Tesla, Apple, Meta, Microsoft, Alphabet, and Amazon, have seen astronomical rises in share prices from 2019 to 2024. Nvidia’s price increased 44x during this period, followed by Tesla at 23x. However, there has been a correction in their peak prices in 2025, ranging from 19% to 53%. Analysts point out that correction was due to high valuations, impending trade war, the Fed deciding to keep interest rates ‘higher for longer’, and emergence of AI as disrupter
Headwinds may turn into Tailwinds
The correction has brought the prices in a range that may have become lucrative for some investors. Some significant factors, as explained below, may turn positive in the coming time:
Reasonable valuations: With an average 22% correction, the prices are no longer overvalued. They may have become reasonably valued if not undervalued. Though further price declines cannot be ruled out, long-term investors can buy them in small tranches
Impending trade war: There are indications that the trade war may not be as severe as was earlier thought. Many countries may get off with low tariffs as the US risks stoking its own inflation with high tariffs
Fed maybe inclined to lower interest rates: President Trump’s policies risk forcing the US into a recession. This maybe a silver lining since the Fed will be inclined to reduce rates earlier
Embracing AI: US companies are expected to be at the forefront of AI development, so there maybe an opportunity in disruption
Good prices and good news never come together: Finally, prices come lower only when the future looks troubled. Optimists may see opportunity in difficult times. These are troubling times and present a good opportunity to buy these blue chips on dips
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