Big Tech Bubble Still Has Room to Run—Bank of America Sees Further Upside Ahead

Big Tech isn't done climbing yet—Bank of America just doubled down on its bullish call.

Fueled by AI mania and zero-rate hangover, mega-caps keep defying gravity. No peak in sight.

Analysts point to cash-rich balance sheets and monopolistic moats. Everyone's piling in—what could go wrong?

Just don’t mention that most valuations assume perpetual growth and zero regulatory risk. Typical finance genius.

Ride the wave while it lasts—but maybe keep an exit strategy handy.

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Strategists led by Michael Hartnett analyzed ten stock bubbles since 1900 and concluded that the average trough-to-peak return was 244%. The Magnificent 7 have risen by 223% since March 2022, suggesting that the group has “more to go.”

Magnificent 7 Crowded, But Not Yet Extreme

The team also found that previous stock bubbles concluded with trailing price-to-earnings (P/E) ratios around 58x with prices 29% above the 200-day moving average. The Magnificent 7 currently have an average trailing P/E of 39x while trading an average of 20% above their 200-day moving averages.

The findings come despite the Magnificent 7 being the most crowded trade in Bank of America’s fund manager survey, showing that 42% of respondents were long the group. Hartnett suggested holding “distressed value” stocks alongside big tech, highlighting energy stocks and companies in the United Kingdom and Brazil.