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The S&P 500 is up nearly 4.4% year-to-date, recovering losses from earlier in the year, driven largely by substantial gains from major tech companies known as the “Magnificent Seven,” including Meta Platforms, Microsoft, and Nvidia. In contrast, Tesla, Apple, and Alphabet are experiencing investor concerns over their limited advancements in artificial intelligence (AI), impacting their stock performance.
For instance, Tesla recently recovered significant losses following its robotaxi event, despite falling vehicle deliveries. Apple and Alphabet are similarly situated, with weak AI integration affecting their investment theses. Currently, Apple has a P/E ratio of 31.2, while Alphabet’s is 18.6, indicating a more favorable valuation for the latter as investors remain cautious due to competition in the AI space.
Investors are encouraged to consider long-term prospects for Tesla, Apple, and Alphabet, despite the current lack of direct returns on AI initiatives. Notably, issues such as Google Search’s performance amidst growing AI competition represent a crucial factor affecting Alphabet’s stock outlook.
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