Equities Weekly: Wall Street Continues to Be Upbeat on Big Tech
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Chief Investment Office30 Jul 2025
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Wall street continues to be upbeat on Big Tech. As we head into the thick of the 2Q25 earnings season, Wall Street continues to be sanguine about the prospect of Big Tech. The tech-heavy Nasdaq composite is up 9.7% YTD (as at 28 Jul) despite ongoing worries about Trump’s erratic tariff policy and macroeconomic uncertainty. Volatility notwithstanding, analysts are generally optimistic about AI monetisation and cloud as key growth drivers for the industry. Companies that have announced results include Netflix and Alphabet, both of which posted beats on revenue and earnings. Tesla disappointed with a second straight quarter of sales decline. Meta, Microsoft, Apple, and Amazon are due to report this week.

Looking forward, Microsoft, Amazon, and Alphabet remain well-positioned to benefit from sustained AI and cloud adoption. Meta too has shown increasing commitment to the AI trend through its commitment to spend “hundreds of billions” to develop AI compute infrastructure. On the other hand, Tesla faces headwinds from falling EV sales amid stiff competition and uncertainty around its CEO’s political ambition. Apple also continues to be under pressure from Trump’s tariffs due to its heavy reliance on China for parts and manufacturing.

This earnings season will be crucial in determining whether the technology sector rally will maintain its momentum for the coming quarter. But on a longer-term basis, we continue to overweight US technology as a key pillar on the growth end of our barbell portfolio. We favour players with AI and cloud strength that have robust pricing power and moat characteristics.

Equity fund flows: During the week ended 23 Jul, both Developed Market (DM) and Emerging Market (EM) Equity Funds recorded modest inflows of USD3.8bn and USD2.0bn respectively, reflecting cautious optimism among investors. Among DMs, US and Japan saw outflows of USD7.7bn and USD0.7bn respectively while Europe bucked the trend with a USD1.1bn inflow. This bifurcation reflects ongoing investor interest in Europe as a beneficiary of fiscal stimulus. On the EM front, China reversed three consecutive weeks of outflow with an inflow of USD1.7bn for the week. This reversal was driven in part by the Chinese government’s “anti-involution” campaign, which is seen as a positive for corporate profitability in China.

Figure 1: Revenue outlook – Mag 7 tech giants


Source: LSEG, DBS


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