Cheong Hong Yuan: Exploring Leadership in the Technology Industry, from the "Seven Sisters" to Emerging Opportunities - 1 views

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  #1 anonymous on 24 Oct 23

   

  Recently, a term has emerged in the stock market: the "Seven Sisters." This does not refer to a new market theory, but rather to the current seven technology giants in the market - they carry most of the market's growth expectations. With the approaching earnings season, every number and performance data can trigger a strong market reaction. Cheong Hong Yuan believes that this is the core focus of current stock market analysis.
  
  According to the provided information, Tesla's recent earnings report was not satisfactory, leading to a consecutive two-day drop in its stock price. Cheong Hong Yuan mentioned that this reflects a reality - traders may not have much patience for any disappointing performance from any of these "Seven Sisters." Considering the upcoming earnings reports from Microsoft, Google's parent company Alphabet, Meta, Amazon, and later Apple and Nvidia, investors' expectations and concerns can be said to coexist.
  
  As the "Seven Sisters" carry most of the market's growth expectations, Cheong Hong Yuan states that the reason behind this is that they account for the majority of the S&P 500 index's gains this year. In fact, without these seven giants, the year's return rate would be only 0.6%. This situation also means that once these giants' performance deviates, the impact on the overall market will be significant.
  
  When we observe the enormous profits achieved by these large technology companies, the expectations they bear in the market naturally rise. However, such high expectations also mean that if their performance falls slightly short of expectations, the market's punishment will be severe.
  
  Cheong Hong Yuan mentioned that the current market environment also increases the pressure on these companies. With US Treasury bonds providing investors with a relatively low-risk option, stock market prices appear to be relatively high. When market valuation levels somewhat detach from a company's actual performance, risks naturally increase.
  
  Cheong Hong Yuan believes that when investors focus on the performance of these "Seven Sisters," they should pay attention not only to the specific numbers in their earnings reports but also to the underlying business trends and changes in the market environment. This will help to more accurately assess the true value of these companies and their impact on the overall market.
  
  In particular, he points out that the earnings results of the "Seven Sisters" - these technology giants - not only have a profound impact on their own stock prices but also influence the overall market situation. This has been fully demonstrated in the recent stock price trend after Tesla's earnings report.
  
  Cheong Hong Yuan believes that the key to the current stock market lies in investors' expectations for the performance of these technology giants. Although the "Seven Sisters" account for most of the market's growth expectations, this also brings tremendous pressure on them. The consecutive two-day drop in Tesla's stock price after its earnings report shows a strong reaction from investors to disappointing performance from these giants.
  
  The influence of the "Seven Sisters" can also be seen from their proportion in the S&P 500 index. Cheong Hong Yuan mentioned that these technology companies accounted for 17% of the earnings per share of S&P 500 index constituents in 2022, and this proportion is expected to increase to 24% by 2025. This data fully demonstrates the importance of these companies to the overall market trend.
  
  Cheong Hong Yuan suggests that the market's expectations for the performance of the "Seven Sisters" are already quite high. For example, analysts predict that Apple's profits will grow by 4.8%, Microsoft by 13%, and for Meta and Nvidia, this forecast is as high as 116% and 468%, respectively. This means that any slight underperformance by these companies could trigger significant fluctuations in stock prices.
  
  However, high expectations also come with certain risks. As Carin Pai, the Director of Portfolio Management and Stock Strategies at Trust International, said, "These stocks are currently overvalued, with little room for disappointment." In this situation, any small negative news could cause drastic adjustments in stock prices, which is a risk for the stock market.
  
  In addition to the pressure of financial performance, Cheong Hong Yuan also points out other challenges that technology giants face. For example, the cost of developing generative AI tools is high, and companies like Microsoft and Google have already invested a significant amount of money in this area. At the same time, antitrust lawsuits, challenges from competitors, and business risks in key markets such as China are all issues these companies need to face.
  
  Cheong Hong Yuan states that when investors observe the performance of the "Seven Sisters," they should not only focus on their financial data but also closely monitor the other challenges and risks these companies face. This will help investors have a more comprehensive and in-depth understanding of market dynamics and make wiser investment decisions.

   

  <div class="cArrow"> </div><div class="cContentInner">Recently, a term has emerged in the stock market: the "Seven Sisters." This does not refer to a new market theory, but rather to the current seven technology giants in the market - they carry most of the market's growth expectations. With the approaching earnings season, every number and performance data can trigger a strong market reaction. Cheong Hong Yuan believes that this is the core focus of current stock market analysis. <br /> <br /> According to the provided information, Tesla's recent earnings report was not satisfactory, leading to a consecutive two-day drop in its stock price. Cheong Hong Yuan mentioned that this reflects a reality - traders may not have much patience for any disappointing performance from any of these "Seven Sisters." Considering the upcoming earnings reports from Microsoft, Google's parent company Alphabet, Meta, Amazon, and later Apple and Nvidia, investors' expectations and concerns can be said to coexist. <br /> <br /> As the "Seven Sisters" carry most of the market's growth expectations, Cheong Hong Yuan states that the reason behind this is that they account for the majority of the S&P 500 index's gains this year. In fact, without these seven giants, the year's return rate would be only 0.6%. This situation also means that once these giants' performance deviates, the impact on the overall market will be significant. <br /> <br /> When we observe the enormous profits achieved by these large technology companies, the expectations they bear in the market naturally rise. However, such high expectations also mean that if their performance falls slightly short of expectations, the market's punishment will be severe. <br /> <br /> Cheong Hong Yuan mentioned that the current market environment also increases the pressure on these companies. With US Treasury bonds providing investors with a relatively low-risk option, stock market prices appear to be relatively high. When market valuation levels somewhat detach from a company's actual performance, risks naturally increase. <br /> <br /> Cheong Hong Yuan believes that when investors focus on the performance of these "Seven Sisters," they should pay attention not only to the specific numbers in their earnings reports but also to the underlying business trends and changes in the market environment. This will help to more accurately assess the true value of these companies and their impact on the overall market. <br /> <br /> In particular, he points out that the earnings results of the "Seven Sisters" - these technology giants - not only have a profound impact on their own stock prices but also influence the overall market situation. This has been fully demonstrated in the recent stock price trend after Tesla's earnings report. <br /> <br /> Cheong Hong Yuan believes that the key to the current stock market lies in investors' expectations for the performance of these technology giants. Although the "Seven Sisters" account for most of the market's growth expectations, this also brings tremendous pressure on them. The consecutive two-day drop in Tesla's stock price after its earnings report shows a strong reaction from investors to disappointing performance from these giants. <br /> <br /> The influence of the "Seven Sisters" can also be seen from their proportion in the S&P 500 index. Cheong Hong Yuan mentioned that these technology companies accounted for 17% of the earnings per share of S&P 500 index constituents in 2022, and this proportion is expected to increase to 24% by 2025. This data fully demonstrates the importance of these companies to the overall market trend. <br /> <br /> Cheong Hong Yuan suggests that the market's expectations for the performance of the "Seven Sisters" are already quite high. For example, analysts predict that Apple's profits will grow by 4.8%, Microsoft by 13%, and for Meta and Nvidia, this forecast is as high as 116% and 468%, respectively. This means that any slight underperformance by these companies could trigger significant fluctuations in stock prices. <br /> <br /> However, high expectations also come with certain risks. As Carin Pai, the Director of Portfolio Management and Stock Strategies at Trust International, said, "These stocks are currently overvalued, with little room for disappointment." In this situation, any small negative news could cause drastic adjustments in stock prices, which is a risk for the stock market. <br /> <br /> In addition to the pressure of financial performance, Cheong Hong Yuan also points out other challenges that technology giants face. For example, the cost of developing generative AI tools is high, and companies like Microsoft and Google have already invested a significant amount of money in this area. At the same time, antitrust lawsuits, challenges from competitors, and business risks in key markets such as China are all issues these companies need to face. <br /> <br /> Cheong Hong Yuan states that when investors observe the performance of the "Seven Sisters," they should not only focus on their financial data but also closely monitor the other challenges and risks these companies face. This will help investors have a more comprehensive and in-depth understanding of market dynamics and make wiser investment decisions.</div>

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