$Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$[...
$Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL.US)$GoogleAlphabet, the parent company, saw its stock price fall by 3.3% on Monday. Prior to that, UBS Group downgraded Alphabet from 'buy' to 'neutral', which is the latest evidence of Wall Street analysts' waning enthusiasm for large-cap tech stocks in the USA.
Large-cap tech stocks, as well as tech stocks closely related to AI, have been driving the US stock market towards a 'tech bull market' this year. However, concerns about the concentration of rising tech stocks and their valuations in the market have led some analysts to question whether there is still room for further upside in this round of the US stock market rebound, and what the next phase of stock market gains could be.
US stocks fell across the board on Monday, and traders' expectations of a rate cut by the Federal Reserve this year also began to cool. Federal Reserve Chairman Jerome Powell emphasized last week that, after skipping a rate hike in June, the Fed may resume tightening its monetary policy. He told members of Congress that the Fed may raise the benchmark interest rate by another 50 basis points this year. Powell's hawkish remarks seem to have had an impact on the short-term interest rate market, and traders are now readjusting their expectations. The current market for overnight index swaps related to the Fed's meeting shows that traders expect the policy rate to peak after another 25 basis point hike, which is in sharp contrast to the previous expectation of a 50 basis point rate cut this year.
Lloyd Walmsley, an analyst from UBS Group, wrote in his report downgrading Alphabet, Google's parent company: 'We currently find it difficult to see significant upside in revenue growth for Google websites in the single digits, and achieving the market's expectation of accelerating to 11% growth is equally challenging.' He also believes that Alphabet's revenue faces risks associated with generative AI and stated, 'This may take time to optimize.' He added that, after the stock rose 34% this year, the risk profile appears to be more balanced.
UBS's downgrade this time lowered Alphabet's consensus rating score (representing the ratio of 'buy', 'hold', and 'sell' ratings) to 4.69 out of a maximum of 5 points, the lowest level since December 2019. A year ago, the consensus rating was 4.96 out of 5 points. UBS analyst Walmsley becomes another analyst who is bearish on Alphabet, following some other major Wall Street banks publicly stating that Google's stock price is unlikely to continue its rapid rise.
Large-cap tech stocks, as well as tech stocks closely related to AI, have been driving the US stock market towards a 'tech bull market' this year. However, concerns about the concentration of rising tech stocks and their valuations in the market have led some analysts to question whether there is still room for further upside in this round of the US stock market rebound, and what the next phase of stock market gains could be.
US stocks fell across the board on Monday, and traders' expectations of a rate cut by the Federal Reserve this year also began to cool. Federal Reserve Chairman Jerome Powell emphasized last week that, after skipping a rate hike in June, the Fed may resume tightening its monetary policy. He told members of Congress that the Fed may raise the benchmark interest rate by another 50 basis points this year. Powell's hawkish remarks seem to have had an impact on the short-term interest rate market, and traders are now readjusting their expectations. The current market for overnight index swaps related to the Fed's meeting shows that traders expect the policy rate to peak after another 25 basis point hike, which is in sharp contrast to the previous expectation of a 50 basis point rate cut this year.
Lloyd Walmsley, an analyst from UBS Group, wrote in his report downgrading Alphabet, Google's parent company: 'We currently find it difficult to see significant upside in revenue growth for Google websites in the single digits, and achieving the market's expectation of accelerating to 11% growth is equally challenging.' He also believes that Alphabet's revenue faces risks associated with generative AI and stated, 'This may take time to optimize.' He added that, after the stock rose 34% this year, the risk profile appears to be more balanced.
UBS's downgrade this time lowered Alphabet's consensus rating score (representing the ratio of 'buy', 'hold', and 'sell' ratings) to 4.69 out of a maximum of 5 points, the lowest level since December 2019. A year ago, the consensus rating was 4.96 out of 5 points. UBS analyst Walmsley becomes another analyst who is bearish on Alphabet, following some other major Wall Street banks publicly stating that Google's stock price is unlikely to continue its rapid rise.
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