Trump's policy moves are causing angst. But one analyst says the broader AI thesis is still intact, and he names Tesla and Microsoft among big potential winners.
The technology stocks that helped lead the market last year have had a rough go of it in 2025. This was evidenced Monday by Big Tech's historic decline in market capitalization.
The "Magnificent Seven" grouping of large technology stocks collectively shed $759 billion in market cap during Monday's rout. That was the group's largest one-day loss of market cap on record, according to Dow Jones Market Data, based on data going back to May 18, 2012, when Meta Platforms, Inc. went public.
While Tesla Motors led the declines from a stock perspective, Apple and NVIDIA were greater contributors to the market-cap wipeout. Apple shares fell 4.9% in Monday trading to shave $174 billion off the company's market value. Nvidia's stock declined 5.1% to erase $139 billion in valuation, while Tesla's stock slid 15.4% as the electric-vehicle company saw its market cap fall by $130 billion.
The market generally came under pressure Monday, as investors worried about a potential recession down the road. That exacerbated various fears in the tech sector, including around tariff threats and whether the ever-rising spending budgets pledged toward artificial-intelligence projects are sustainable.
But in the wake of the carnage, Wedbush analyst Daniel Ives urged patience. "We clearly need stable Trump policy and investors need to know the rules of the game... but that will all happen over the coming months and we do not believe this dramatically changes the trajectory of the AI revolution over the coming years," he wrote Monday afternoon.
He called Nvidia, Apple, Tesla, Microsoft and Palantir Technologies Inc. his best plays for "this brutal selloff," advising that investors think over a longer time horizon. Trump's policy stance in "no way changes the $2 trillion of AI [capital expenditures] on the horizon," he added.
Whether tech stocks seem pricey or not depends on perspective. A Melius Research analyst commented Monday that Nvidia's stock trades far more cheaply than it did before ChatGPT burst on the scene and fueled incredible demand for the company's compute hardware.
Yet Glenmede strategists wrote ahead of the open that "the market's largest companies and other related technology darlings are still being awarded significant premiums, although these are down from their peak."
Large tech stocks enjoyed big runs in 2024, led by Nvidia's 171% gain. Now Meta, the second-best performer of the bunch last year, is the only "Magnificent Seven" name that's in positive territory so far this year, up just about 2%. Tesla has been by far the worst performer, with its stock down 45%, followed by Nvidia, with a 21% stock decline.
Within the group, only shares of Microsoft and Amazon.com fared better than the Nasdaq Composite Index on Monday, dropping 3.3% and 2.4%, respectively, as compared with a 4.0% drop for the tech-heavy benchmark. But given that these are still two of the largest companies in the U.S., the market-cap declines were still significant, at $98 billion for Microsoft and $50 billion for Amazon.
Alphabet and Meta were responsible, respectively, for $97 billion and $70 billion in lost market cap on Monday.