As we start the week, it seems like a reality check is beginning to take hold. The focus isn't just on market leadership but also on the composition of that leadership. Companies like Amazon, Meta, Microsoft, and, notably, Nvidia have been performing strongly. However, Alphabet, Apple, and especially Tesla seem to be a bit of a knee-capper.

Indeed, it serves as a reminder of the risks that emerge when valuations reach extreme levels, and the trend of following the leader takes a step back. Therefore, it's unsurprising to see return dispersion among the esteemed "Magnificent 7" reaching unprecedented levels, or at least the highest observed in the past decade, which could unsettle exclusive funds tied to these top performers.

At one end of the stick, NVDA has returned an impressive 87% year-to-date, fueled by its robust Q4 earnings report and sustained investor optimism surrounding AI. Meanwhile, at the other end of the nasty stick, Tesla appears to be running on empty, facing challenges and uncertainties that have affected its performance.

Using this as a profit-taking point is tempting, especially when these heavyweight correlations snap. If Nvidia is picking up Tesla's slack, the question arises: what happens if the frenzy surrounding AI takes a break?

Share: Feed news

SPI Asset Management provides forex, commodities, and global indices analysis, in a timely and accurate fashion on major economic trends, technical analysis, and worldwide events that impact different asset classes and investors.

Our publications are for general information purposes only. It is not investment advice or a solicitation to buy or sell securities.

Opinions are the authors — not necessarily SPI Asset Management its officers or directors. Leveraged trading is high risk and not suitable for all. Losses can exceed investments.

Recommended content


Recommended content

Editors’ Picks

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD fluctuates near 1.0750 as markets turn subdued

EUR/USD continues to trade in a relatively tight channel at around 1.0750 in the American session on Wednesday. The pair struggles to finding direction with US markets remaining closed in observance of the Juneteenth Holiday.

EUR/USD News

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD stabilizes above 1.2700 after UK inflation data

GBP/USD clings to modest daily gains above 1.2700 on Wednesday. The data from the UK showed that annual inflation, as measured by the change in the Consumer Price Index, declined to 2% in May from 2.3% in April. The BoE will announce policy decisions on Thursday.

GBP/USD News

Gold extends sideways grind at around $2,330

Gold extends sideways grind at around $2,330

Gold (XAU/USD) struggles to capitalize on the previous day's bounce from the vicinity of the $2,300 mark and oscillates in a narrow band near $2,330. US bond markets remain closed in observance of the Juneteenth Holiday, limiting the pair's volatility.

Gold News

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon MATIC poised for 10% rally as momentum indicators signal strength

Polygon price formed a bullish divergence on a momentum indicator, signaling a reversal. On-chain data shows MATIC’s capitulation event occurred between June 12 and 18.

Read more

Investors' focus will be on Europe

Investors' focus will be on Europe

In the euro area, the EU commission will reveal against which countries it recommends opening an excessive deficit procedure (EDF) due to breaches of the EU fiscal rules.

Read more

Forex MAJORS

Cryptocurrencies

Signatures