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Pro: Big Tech stocks

2 d ago

Big Tech is having its worst year since 2022, with rising Treasury yields threatening to deepen the underperformance, according to Barclays. In a Tuesday note, Barclays head of U.S. equity derivatives strategy Stefano Pascale said the cohort—Alphabet, Amazon, Apple, Meta, Microsoft and Nvidia—has lagged the S&P 500 for 92% of the year to date, on pace for its second-worst 12-month period since 2013. "Multiple compression has been the primary driver of Big Tech's underperformance this year," Pascale noted. The 10-year U.S. Treasury yield hit a 20-month high of 4.8% on Tuesday, while the 30-year yield surged above 5.2%, fueled by U.S. strikes in Iran, rising energy prices, and weaker-than-expected economic data. Those conditions have led some investors to predict the Federal Reserve will raise rates in September, mirroring the 2022 setup that crushed Big Tech stocks. However, Barclays also noted that new AI-linked financing could ease capital expenditure concerns for hyperscalers and semiconductors, potentially unlocking demand and alleviating pressure on the sector. The Invesco QQQ Trust fell more than 1% Tuesday, while the S&P 500 shed less than 1%.