3 Ways To Profit With Big Tech Back In The Driver's Seat

Forbes

a day ago

Big Tech is back in the driver's seat! The technology sector has been leading the market rally off the early-April lows – with sizable double-digit gains piling up. Here are three ways you can profit, courtesy of top MoneyShow experts.
Mike Larson MoneyShow.com
Big Tech is SO back. Again.
Ever since the stock market bottomed out on April 7, we've seen most (though not ALL) of the biggest technology stocks rocket higher. All but two are outperforming smaller-capitalization stocks, as represented by the iShares Russell 2000 ETF (IWM), as well as the SPDR S&P 500 ETF Trust (SPY) -- as you can see in this MoneyShow Chart of the Day.
Big Tech SPY IWM
Nvidia Corp. (NVDA) is the Big Tech name with the most post-'Liberation Day' juice – up 58%. Tesla Inc. (TSLA) isn't far behind, with a 40.4% rally. Next are Microsoft Corp. (MSFT) and Meta Platforms Inc. (META), both nipping at Tesla's heels with gains of 37.8% and 37.3%. Only Apple Inc. (AAPL) and Alphabet Inc. (GOOGL) are notably lagging (+11.2% and +16.4%, respectively).
What's behind the resumption of the Big Tech trade – a trade that has periodically popped back up over the past year or two? A few things...
First, investors are boosting bets on earlier Federal Reserve rate cuts. Lower rates help boost growth-stock multiples.
Second, concerns about tariff and trade policy have eased. President Trump has dialed backed some of his most punitive tariffs – and signaled a willingness to keep negotiating with trade partners. That could prevent some of the worst-case tech supply chain scenarios from playing out.
Third, FOMO is back in play. Investors got too bearish during the declines, didn't get on board early enough in the subsequent rally, and they're now dog-piling into old favorites to play catch up.
Add it all up and you have a tech sector that is leading again – and driving the averages to new highs. From where I sit, that's bullish…and underscores why my 'Be (Selectively) Bold' approach (still) looks like the right one here.
Joe Markman Digital Creators & Consumers
It's happening in real-time, yet most investors remain completely oblivious. The 'it' is the Artificial Intelligence (AI) revolution, the greatest productivity accelerant since electricity. Let's talk about what it means for Microsoft Corp. (MSFT).
According to a report on Bloomberg, MSFT is planning to cut thousands of jobs in its Xbox gaming division. These cuts will be in addition to the 6,000 employees fired in May at LinkedIn and other Microsoft subsidiaries.
This is a sticky subject. There is going to be massive disruption. But it is a wonderful time to be a Microsoft shareholder.
Microsoft Corp. (MSFT)
Analysts scoffed at Magnificent Seven corporate leaders when they kept increasing capital expenditures for AI infrastructure. Research suggested that the companies would never earn a return on that invested capital because they couldn't imagine a large-enough business to justify the investment. When Satya Nadella, Microsoft's chief executive, invested $10 billion in OpenAI two years ago, Wall Street analysts thought he had lost his mind. There was no demand for another Siri, they wrote.
What the analysts missed then is that ChatGPT, OpenAI's flagship product, isn't Siri. ChatGPT can write software code, while Siri can barely play songs on Apple Music. Apple Inc.'s (AAPL) digital assistant was never going to succeed, mostly due to corporate culture. The iPhone maker is a hardware company. But executives at the other Mag-7 companies live and breathe software. They understood immediately what ChatGPT was, and they went all-in on AI.
Make no mistake: layoffs at the biggest software companies are about to become much more common. This is because large portions of software employees can be replaced with AI. In the same way that electricity enabled mechanized, automated production that required fewer workers to achieve greater output, AI software is going to hollow out large parts of white-collar work. These changes will happen swiftly and persistently, as they are now occurring at Microsoft.
In the past, foundational technology shifts have led to greater employment as new sectors and businesses were born. Pessimists said the Internet was going to shutter the global economy. More than two decades later, it turns out that connecting the entire world to a network led to millions of new jobs in the digital economy and employment in business verticals that previously did not exist.
The flip side for investors is that productivity means increased profits. When headcounts are lower, more money flows to the bottom line. None of this is being reflected currently in share price valuations. Expect this to change in the second half of 2025 as hyperscalers talk about doing more with less, much to the surprise of the Wall Street analyst community.
Recommended Action: Buy MSFT.
George Gilder Gilder's Technology Report
The market capitalization leaderboard for semiconductors continues to highlight the divergence between IP ownership and physical production. US firms dominate the top rankings — Nvidia Corp. (NVDA) at $2.476 trillion, Broadcom Inc. (AVGO) at $804 billion — but that masks how irreplaceable the manufacturing layer has become in a geopolitically fractured world.
Key fabrication and tooling players like Taiwan Semiconductor Manufacturing Co. (TSM), Samsung, and ASML Holding NV (ASML) remain undervalued by comparison. This valuation gap reflects investor focus on scalability and software leverage.
Top 10 Semiconductors
In today's semiconductor market, location defines exposure, not necessarily strength. Nvidia, Broadcom, and Advanced Micro Devices Inc. (AMD) — all US-headquartered — are rewarded for their innovation, commanding premium valuations and massive market capitalizations. But their products are inseparable from the Asian manufacturing ecosystem. TSMC, Samsung, and ASML remain irreplaceable at the physical layer of chip production.
Tariffs, meanwhile, distort incentives. They penalize final assembly hubs like China without reshoring critical stages such as wafer fabrication or back-end packaging. This imbalance creates investment opportunities — and risks.
US design-centric firms gain margin leverage, but companies controlling equipment, lithography, or memory — like ASML, Applied Materials, and SK Hynix — are the real backbone of global production.
Investors should pay close attention to companies bridging these two worlds: Those that own irreplaceable manufacturing capacity and are structurally tied to Western markets. ASML and TSM remain critical infrastructure. Applied Materials Inc. (AMAT), Lam Research Corp. (LRCX), and KLA Corp. (KLAC) control the tools that keep fabs alive.
Nvidia and Broadcom may lead the stock market — but it's the factory floor that decides who can actually deliver.