Not So Fast
Big Tech strikes back against "the end of US exceptionalism" narrative. My full detailed notes below...
Mag 7 stocks are making a major statement today, pushing back against “the end of US exceptionalism” narrative.
MSFT and META earnings last night are showing why it’s never a smart move to bet against US Big Tech.
MSFT +9% today on big beat with Azure +35% YoY (vs +31-32% exp).
META +5% on topline beat (unexpected) and raise on CapEx guide.
NVDA +4%, responding to higher Meta CapEx guidance
2 weeks ago, I talked about how the relative valuation of Big Tech vs the SPX was at 10-year lows, which felt very extreme
Mag 7 was no longer the most crowded trade in town (long gold took the top spot).
Not only that, gross Hedge Fund exposure in U.S. Tech hit 5+ year lows
So what happens? The scenario “nobody” wanted.
Not only has Big Tech “held the line” on earnings (so far), but exceeded all expectations (which had been rapidly reset much lower over the last month +).
Positioning and leverage were completely de-risked and underweight Mag 7 / US equities in general
And suddenly, Mag 7 is awkwardly leading to the upside again following MSFT and META earnings last night
In a rally that funds are extremely underweight for, but are now forced to buy some back higher
