AI transformation becomes a watershed for the "Seven Giants"! Apple, Tesla, and Google drag down the S&P 500
The weak performance of tech giants such as Apple, Tesla, and Alphabet has dragged down the S&P 500 index, causing it to drop by more than 120 points. Although the index has still recorded an increase of about 5% year-to-date, there are concerns in the market about the future performance of these high market capitalization companies. Analysts point out that if these companies cannot break free from their slump, the overall market will face difficulties. Meanwhile, companies like Microsoft, Nvidia, and Meta have seen significant gains due to their AI strategies, highlighting the internal divergence within the market
According to Zhitong Finance APP, recent discussions among investors have focused on: If the technology giants with high market capitalization but sluggish stock price trajectories in the S&P 500 index can shake off their downturn, how much uplift potential will the benchmark index gain? Under the dual pressure of tariff clouds and resistance to AI business advancement, Apple Inc. (AAPL.US), which ranks third among S&P 500 constituents with a market capitalization of $3.2 trillion, has accumulated a 17% decline this year; Alphabet (GOOGL.US), the parent company of internet advertising giant Google, has seen its stock price pressured by market concerns over AI chatbots impacting its core search business, resulting in a 7% decline, with a current market capitalization of $2.1 trillion; Tesla (TSLA.US), the leader in electric vehicles, has been dragged down by severe fluctuations in demand, with a year-to-date decline of 26%.
According to authoritative estimates, the weak performance of these three heavyweight stocks has dragged down the market capitalization-weighted S&P 500 index by over 120 points, while the index still recorded an annual increase of about 5% at Tuesday's close.
Paul Stanley, Chief Investment Officer of Granite Bay Wealth Management, pointed out: "The market breadth is indeed expanding, but the seven major tech stocks occupy too high a weight in the overall market. If these giants remain stagnant, the entire market will inevitably fall into trouble." Data supports this view: Although Microsoft (MSFT.US), Nvidia (NVDA.US), and Meta (META.US) have achieved over 14% gains this year due to their AI infrastructure layout and commercialization breakthroughs, significant differentiation has emerged within the "seven giants" camp. Notably, these three leading stocks contributed nearly half of the S&P 500 index's gains this year, along with companies like Netflix (NFLX.US), Broadcom (AVGO.US), and Palantir (PLTR.US), collectively supporting the index's valuation close to historical highs.
Market observations indicate that the effectiveness of corporate AI strategies implemented in 2025 will become a key watershed. Nvidia benefits from the investment boom in computing power infrastructure, Meta drives advertising revenue growth through AI technology, while Apple has yet to translate its "AI for All" vision, announced last year, into substantial product competitiveness. Reports suggest that Apple is considering incorporating Anthropic or OpenAI technology to enhance the new Siri functionality, leading to a stock price rebound of over 3% this week. Paul Marino, Chief Revenue Officer of Themes ETFs, admitted: "Capital will not easily increase its stake until Apple presents a clear artificial intelligence roadmap."
Currently, the "seven giants" account for about one-third of the weight in the S&P 500 index, a proportion that is equivalent to the total weight of seven sectors among the eleven sectors of the index. Notably, Amazon (AMZN.US), a member of the seven giants, has seen its stock price remain basically flat this year, failing to continue its previous upward momentum Paul Stanley warns: "Even though the improvement in market breadth is a positive signal, to offset the drag effect of heavyweight stocks like Apple, we need to see broader market upward momentum. It is currently unclear what factors can drive the remaining members of the seven giants to continue to outperform expectations."
In the dimension of global technological competition, the AI strategic game between China and the United States is extending into the financial sector. In the face of the U.S. attempt to consolidate the dollar's position through emerging technologies, Chinese policy think tanks and economists are actively exploring the potential applications of stablecoins in cross-border payments. Although China maintains a comprehensive ban on cryptocurrencies, senior officials at the central bank have recently indicated new variables in related discussions, and the impact of this technological revolution on the global financial system continues to ferment
