The largest US tech firms, currently accelerating their AI infrastructure buildout, may also be the best insulated from geopolitical supply chain shifts and trade disputes.
After a subdued start to 2025, the biggest names in US technology may be on the cusp of yet another period of outperformance.
Despite a lag in returns year-to-date, the sector has quietly reloaded, adjusted its valuations, and is showing signs that it is preparing to lead again, this time with more sustainable momentum.
Earnings tell the story. Collectively, the so-called Magnificent Seven — Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia and Tesla — have delivered quarterly results that exceeded expectations by a wide margin.
While their share prices have retreated or stagnated since January, their profits have not. In fact, operating margins are expanding, cash flow is solid, and capital expenditures continue to point to long-term conviction in innovation-heavy strategies.
This divergence between earnings and stock prices is precisely what makes this moment so interesting.
Upside potential
With investor scepticism elevated and some sidelined capital seeking clarity, the upside potential could now be greater than it was when these stocks were soaring at the start of the decade. Forward price-to-earnings ratios have compressed significantly, especially for Nvidia and Meta, which previously led 2023’s explosive rally. Valuations that once looked stretched now appear palatable — or even attractive — given the underlying growth profiles.
It is also worth remembering how these companies tend to behave when markets wobble. Their revenue streams are less cyclical than most.
Many of their core services, such as cloud infrastructure, advertising, ecommerce, AI platforms and subscription ecosystems, do not just endure in low growth environments, they flourish. This makes them surprisingly resilient during macroeconomic turbulence.
In a world where monetary policy is being reassessed and global growth feels uneven, that resilience becomes a market advantage.
There is also a powerful historical rhythm, too, that could be about to kick in. July has often been a fertile month for the biggest tech names.
“Many of the tech firms' core services, such as cloud infrastructure, advertising, ecommerce, AI platforms and subscription ecosystems, do not just endure in low growth environments, they flourish”
Aggressive buyers
This is typically a period when many US firms ramp up share buyback programmes following earnings season. Tech companies, in particular, sit on immense piles of cash and tend to be among the most aggressive buyers of their own stock. This demand can serve as a powerful tailwind during summer months when market volume thins and retail investors return.
In addition, the AI arms race hasn’t slowed. While the headlines might have cooled, the infrastructure build-out beneath the surface is accelerating.
Microsoft and Google are both scaling new AI models and cloud platforms faster than ever. Amazon’s AWS continues to expand its AI footprint into enterprise. Nvidia is still cornering the market on chips that drive the entire ecosystem. Apple’s next major hardware cycle, which looks set to include AI-enhanced devices, is drawing investor speculation — and with good reason. Even Tesla, whose stock has struggled, remains central to discussions around robotics, automation, and next-gen compute.
Geopolitics is also casting these companies in a new light. With ongoing trade disputes, supply chain shifts and AI regulation debates dominating headlines, large US tech firms — especially those with vertical integration and control over their data and chips — are better insulated than smaller players.
They have the resources to absorb legal battles, negotiate favourable terms and maintain a competitive edge in the regulatory thicket forming around advanced technologies.
As such, while some investors are still asking whether the rally has gone too far, or if the sector is due for a larger correction, the fundamentals suggest otherwise.
I believe that what we can see playing out is not a bubble that is bursting, but a readjustment. The euphoria of 2023 gave way to scepticism in early 2025, but beneath the noise, the core businesses of these tech giants are outperforming.
It is often this gap between perception and performance where the most compelling opportunities lie.
Markets rarely reward complacency. When investor consensus leans too heavily in one direction, whether optimism or caution, the best returns tend to come from contrarian positioning rooted in data.
Currently, the most unloved leadership group of 2025 might also be the most prepared to rally.
Nigel Green, deVere Group CEO and founder
