According to a report prepared by analysts from the prestigious US Bank, technological ones have already “lost their brightness” and investors are migrating to other types of actions.
2024 was an exceptional year for technology, with the Artificial Intelligence (AI) and the impulse of the “seven magnificent” leading to S&P 500 and Nasdaq to historical maximums. However, the situation changed in 2025, and now investors are redirecting their attention to other sectors with greater growth potential.
Technology loses attractive
Lisa Shalett, Investment Director of Morgan Stanley Wealth Management, points out that the big technological companies They are losing their appeal to cyclic actions, more linked to economic growth. “Technology have lost their brightness, while a greater diversity of companies within the S&P 500 is gaining ground,” explains the expert.
He S&P 500 index remained in a narrow range since December, affected by uncertainty around tariffs and technology spending. To this is added the volatility in the bond market, which has generated concern among investors.
Three key factors behind the change
SHALETT identifies three main reasons behind the rotation of assets outside the great technological ones:
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Impact of monetary flexibility: The Federal Reserve (FED) reduced interest rates at a percentage point in the last quarter of 2024 and now plans to take a more cautious approach. They are expected between one and two drops of types in 2025, which is beginning to benefit sectors such as manufacturing. In fact, the manufacturing indices of the Supply Management Institute (ISM) returned to expansion in January, driven by an increase in orders and a recovery in the employment of the sector.
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Deceleration of great technological: Although the S&P 500 as a whole continues to show growth, the 100 largest companies in the index have been exceeding expectations at a lower rate than the next 400 companies. In addition, the actions of the ‘7 magnificent’ have had difficulty maintaining their profit rhythm.
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Best performance from other sectors: While technological ones face pressures, other sectors have shown superior performance. The financial, health and medium capitalization companies have generated greater interest, as well as European and gold actions.
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Changes in investor strategy
The technological sector of S&P 500 had its worst relative performance since 2016. Four of the ‘7 magnificent’ quote below their 50 -day mobile averages, a bearish signal. At the same time, coverage funds have reduced their exposure to these actions, while The corporate insiders have sold actions to the highest rhythm since 2021.
A Bank of America (Bofa) report projects a 10% increase for S&P 500 in 2025, but warns about possible corrections in large technological ones. “The optimism around the ‘7 magnificent’ is at record levels just when its profit growth slows down,” explains Savita Subramanian, Bofa’s strategist.
In this context, investors are adopting a more selective approach, moving away from great technological ones and exploring new opportunities in sectors that could benefit more from the current economic cycle.
Source: Ambito
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