Tech investor Dan Niles is the least excited about this group of “Big Seven” stocks in years, citing stretched valuations and slowing growth among the big tech leaders. Focus instead on a broader-based basket of stocks. “We’ve put out our top five stock picks over the past few years, and there’s been one top-five stock,” Niles told CNBC’s “Money Movers” on Friday. “This is the first year I’ve debated whether No, because many of the big things driving growth are starting to slow down, and AI spending will slow down as well.” The founder of Niles Investment Management expects seven major stocks to perform in the second half of the year as large-cap leaders cede leadership to the broader market. The underperformance will continue until 2025. In particular, he said he prefers value stocks, as well as small and mid-cap stocks that are attractively valued and could benefit from the deregulatory policies promised by President-elect Donald Trump. “I also think that the growth of large-cap stocks will start to slow down next year, and it will enter the artificial intelligence digestion stage next year – capital expenditure growth from 50% to 60%, maybe even 10% to 20% – and it may hurt a lot of people in the technology industry. AI-driven names,” Niles added. Niles said Amazon is the name he still likes among the Big Seven and said expanding margins will drive business in the future.
