Once the crown jewel of global portfolios, U.S. Big Tech stocks are now caught in the crossfire of a growing global trade war and political uncertainty. Tech giants that investors once considered "safe havens" are now rapidly losing their shine.
"The narrative of American exceptionalism has cracked."
In recent months, international investors have pulled back from what was once an unstoppable force: the U.S. technology sector. As the world’s appetite for AI and innovation collided with trade restrictions and geopolitical rifts, even the most dominant players like Nvidia, Apple, and Amazon are taking hits.
From Dominance to Decline
At the height of their dominance, the so-called Magnificent Seven — Nvidia, Apple, Amazon, Meta, Alphabet, Microsoft, and Tesla — collectively made up 35% of the S&P 500's market cap by Q4 2024, with a combined valuation of $17.5 trillion.
Their performance was so robust that:
- Swiss National Bank held 25% of its $150B equity portfolio in Apple, Microsoft, Nvidia, and Amazon.
- Norway’s $1.8T wealth fund earned $222B profit in 2023, half of which came from U.S. tech.
But in 2025, the tables have turned.
Reality Bites: Trade War and AI Competition
A stark warning came when Nvidia revealed it could face $5.5 billion in charges due to new U.S. export restrictions targeting its AI chips bound for China. The result? A 9% drop in Nvidia’s stock, erasing nearly $250 billion from its market value in one day.
This dragged down the entire semiconductor sector, which is now in a 30%+ bear market decline over the last two months — far more severe than the broader S&P 500 pullback.
Chart: Semiconductor Index vs S&P 500 – 2 Month Comparison
AI Supremacy? Not So Fast.
U.S. tech’s perceived AI leadership was also challenged this year, as Chinese firm DeepSeek outpaced expectations, denting the illusion of American invincibility in artificial intelligence.
Combined with Washington’s restrictive export policies and potential European retaliation, U.S. tech is now exposed from every angle.
Chart: Net Profit Margins – Q4 2024
Crowded Trade No More
According to Bank of America’s April 2025 Global Fund Manager Survey, the once-popular "long Mag 7" position — the most crowded trade for 23 straight months — has now been dethroned by gold.
"Gold reclaims its crown as the true safe haven."
The Takeaway
- Tech stocks are no longer insulated from global economic shocks.
- Regulatory and trade challenges are reshaping investment narratives.
- Investors are diversifying away from Big Tech — and toward more traditional safe havens like gold.
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