The Magnificent Seven had a strong May, but the group remains in the red for 2025. What's next?

Taken together, the 澳洲幸运5官方开奖结果体彩网:seven big tech stocks—names like Nvidia (NVDA), Tesla (TSLA), Meta Platforms (META) and more—outperformed dozens of other assets tracked by Deutsche Bank analyst Henry Allen last month. The group saw their stocks rise more than 13% in aggregate in May, their biggest monthly gain in 2 years, according to Allen. 

Nonetheless, the group remains one of the few corners of global markets lower since the start of the y⭕ear. Of 32 different sets of investments tracked by Allen—including global equity indexes, government and corporate bonds, foreign exchange indexes, and commodities—only one other asset, crude oil, is negative fo🔴r the year. 

Whether the Mag Seven can climb into positive territory this month could depend on what Wall Street thinks of a few 澳洲幸运5官方开奖结果体彩网:upcoming corporate events.

What Could Lift Some Mag Seven Laggards in June

Apple (AAPL) will host its Worldwide Developers Conference on June 9. The iPhone maker is expected to unveil a software development kit that helps outside developers build features with Apple Intelligence’s underlying large language models. That would effectively let Apple outsource some of the work of building AI products for its devices, which could help close the perceived gap in AI capab✃ilities between it and major peers. 

And around the middle of the month, Tesla (TSLA) is expected to roll out its robotaxi service in Austin, Texas, in what could♓ be a major test of the company’s autonomous vehicle ambitions. 

Apple and Tesla are the worst-performing stocks in the Mag Seven so far this year, with their shares down about 20% and 16%, respectively. Investor enthusiasm about the companies' progress in some emerging areas seen as vital could help lift their shares.

BofA Upgrades Tech Sector, Downgrades Comms

Bank of America analysts on Monday upgraded the information technology sector—home to Microsoft (MSFT), Nvidia, and Broadcom (AVGO), the latter a non-Magnificent stock—to neutral from underweight, and downgraded communications services—including Alphabet (GOOG) and Meta—to underweight from neutral. They cited active funds’ historically low exposure to IT and high exposure to communications, as well as the communications and media industry’s comparatively unpredictable revenue streams. 

Perceived recession risks 澳洲幸运5官方开奖结果体彩网:have decreased in the last month thanks to easing tensions between the U.S. and China. Lately, though 澳洲幸运5官方开奖结果体彩网:each side 澳洲幸运5官方开奖结果体彩网:has accused the other in recent days of violating the terms of their agreement, demonstrating the fragility of their detente. The Mag Seven’s communications companies, Alphabet and Meta, likely have the most recession-proof ad businesses on the internet thanks to the sheer size of their💝 audiences. 

Yet the tech giants face another risk, according to BofA analysts: Tech companies, they say, addressed elevated interest rates in 2023 by effectively “shortening duration”—they cut costs, reduced capital expenditures, and increased their cash returns. Today, Alphabet and Meta are locked in an all-out 澳洲幸运5官方开奖结果体彩网:AI arms race, spending tens of billions of dollars a year on AI infrastru💦cture. That spending could tie the companies’ hands in the event of a slowdown.

Another risk for tech stocks is their price tag, according to BofA. Valuations have declined from their recent highs, but the stocks are still expensive—the Mag Seven's 澳洲幸运5官方开奖结果体彩网:P/E ratio of 33.1 is well above the S&P 500's long-term average—and earnings expectations remain elevated.