NEW YORK, Dec. 28, 2025, 12:46 p.m. ET — Market closed (weekend)

Wall Street’s cash equity market is closed this Sunday, but Big Tech stocks are still the center of the conversation heading into the final week of 2025—especially as investors weigh record-high index levels against a growing debate over how quickly artificial intelligence spending will translate into durable profits.

The backdrop is bullish on paper: the S&P 500 is hovering near a major psychological marker, and the Nasdaq has posted another strong year. But the tone beneath the surface is evolving. After months where mega-cap technology led the charge, money has been rotating into other sectors, a shift that could change how investors approach the “Magnificent Seven” (Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia, Tesla) into 2026. ^[1]

Market setup: record highs, thin liquidity, and a shifting leadership story

With only a handful of sessions left in 2025, the S&P 500 has been trading near record levels and sat about 1% from 7,000 in late-week action, according to Reuters. The index has been on track for its eighth straight monthly gain—its longest such streak since 2017–2018. ^[2]

But a key nuance for Big Tech investors: recent gains have not been purely a mega-cap tech story. Reuters highlighted that technology shares struggled earlier in the month amid concerns tied to AI spending, and the S&P 500 tech sector has fallen more than 3% since the start of November even after rebounding this week. Over the same stretch, areas like financials, transports, healthcare, and small caps have posted gains—classic signs of rotation. ^[3]

MarketWatch added another concentration statistic that Big Tech bulls and bears both cite: AI-driven mega-cap tech stocks now represent roughly 35% of the S&P 500, a level that amplifies upside when the trade is working—and magnifies risk if it isn’t. ^[4]

The next catalyst: Fed minutes and the “rate-cut math” that moves mega-cap valuations

If you’re looking for the next macro headline that can jolt Big Tech, it’s interest-rate expectations.

Reuters reports the Federal Reserve lowered rates by 75 basis points over its last three meetings of 2025, bringing the benchmark rate to 3.50%–3.75%. The minutes from the Fed’s Dec. 9–10 meeting are due Tuesday (Dec. 30), and investors will be watching for clues about how policymakers debated the path ahead. ^[5]

Michael Reynolds, vice president of investment strategy at Glenmede, told Reuters the minutes may be “illuminating” as markets try to handicap how many rate cuts could come next year. ^[6]

For mega-cap tech—where a meaningful portion of valuation can depend on long-duration growth expectations—rate-cut timing matters. In short: softer-rate expectations tend to support higher multiples; stickier rates tend to shift investors toward cash flows they can see now.

Nvidia stock: the AI bellwether meets “vendor financing” questions and fresh skepticism

No Big Tech stock sits more directly at the heart of the AI boom than Nvidia—and the last 24–48 hours brought a new wave of scrutiny alongside the usual bullish forecasts.

A major weekend analysis from The Guardian describes how Nvidia’s sprawling web of partnerships and investments has fueled extraordinary growth, while also raising concerns about the “circular” nature of certain deals—where Nvidia invests in companies that then use the funds to buy Nvidia’s hardware. The report likens some structures to “vendor financing,” and notes investor unease rooted in earlier-era telecom blowups—while emphasizing Nvidia disputes the comparisons and argues its reporting is transparent. ^[7]

The Guardian also cited Charlie Dai, an analyst at Forrester, who framed the risk as one of sustainability rather than legality—arguing Nvidia is “leaning heavily on vendor-financed demand,” which could create exposure if AI growth slows. ^[8]

At the same time, the skepticism trade is alive. The Wall Street Journal reported that hedge fund manager Michael Burry has positioned against parts of the AI complex, including Nvidia (and Palantir), via put options. ^[9]

Yet bulls can point to Wall Street targets and “moat” arguments that remain firmly intact. A Nasdaq.com piece (published by The Motley Fool) cites Morningstar analyst Brian Colello, who argues Nvidia has a wide economic moat given its leadership across GPUs, networking, and software tools needed for AI. That same article also points to analyst target prices implying upside from then-current levels. ^[10]

What to watch Monday: Nvidia is likely to remain a sentiment barometer for the entire AI trade. When Nvidia is strong, semiconductors, hyperscalers, and AI infrastructure plays often lift together. When Nvidia wobbles, the whole complex tends to re-price.

Apple stock: a China demand signal and an Apple Watch legal headline

Apple headlines over the past 48 hours leaned less “AI hype” and more “fundamentals and legal risk.”

Barron’s reported that imports of foreign-branded phones in China—including iPhones—jumped 128% year-over-year in November. The report also pointed to Apple winning a temporary legal victory in its dispute with medical-device maker Masimo: a U.S. district judge denied a request that would have blocked certain Apple Watch imports tied to blood-oxygen sensor claims (even as separate litigation continues). ^[11]

For Apple investors, the China data point matters because iPhone demand in China can shape sentiment quickly—especially at year-end, when positioning tends to be lighter and reactions can be sharper.

What to watch Monday: any follow-on reads across Apple’s supply chain, China smartphone demand indicators, and further legal updates tied to wearables.

Alphabet stock: Waymo’s outage raises robotaxi readiness questions—right as autonomy goes mainstream

Alphabet’s AI story spans everything from search to cloud—but in the last 48 hours, the spotlight has shifted to self-driving.

A Reuters analysis focused on a San Francisco power outage on Dec. 20 that left Waymo robotaxis stalled at intersections and contributed to congestion. Reuters said Waymo later explained that the outage created a “concentrated spike” in confirmation requests that led to response delays, and that it is implementing fleet-wide updates to refine how its vehicles handle large-scale outages. ^[12]

The incident has renewed calls for clearer rules around “teleoperation”—remote human assistance for robotaxis. Philip Koopman, a Carnegie Mellon computer-engineering professor and autonomous-technology expert, warned that if operators mishandle a blackout, regulators should demand proof that larger crises (like earthquakes) can be handled properly. Missy Cummings, director of George Mason University’s Autonomy and Robotics Center and a former adviser to a U.S. road-safety regulator, also urged regulation of remote operations and backup systems. ^[13]

Meanwhile, public fascination with robotaxis is rising fast. Business Insider reported robotaxis “went viral” in 2025 and cited Alphabet-backed Waymo’s expanding footprint and scale, alongside mixed consumer sentiment about riding in autonomous vehicles. ^[14]

Why this matters for Big Tech stocks: autonomy is increasingly being priced not just as a moonshot, but as a regulated product category—meaning reliability incidents can move sentiment and timelines.

Amazon stock: drone delivery pause in Italy underscores the “regulation friction” theme

Amazon’s stock is often discussed through AWS and e-commerce, but the last 24 hours brought a headline about its logistics innovation pipeline.

Reuters reported Amazon decided to halt its commercial drone-delivery plans in Italy, saying that while it made progress with aerospace regulators, the broader business regulatory framework “does not, at this time, support” its longer-term objectives for the program. Italy’s civil aviation authority ENAC called the decision unexpected. ^[15]

This is not just a drone story—it’s a reminder that Big Tech’s moonshots tend to move at the speed of regulation, local permitting, and operational scalability.

Microsoft stock: AI monetization remains the bull case—watch capex and “proof of payback”

Microsoft had fewer breaking, company-specific headlines this weekend, but it remains one of the most important “Big Tech stocks” in the AI conversation because of Azure and enterprise monetization.

A Nasdaq.com article citing Morningstar analysis highlighted Microsoft as one of the top AI plays, and referenced CEO Satya Nadella’s comments around Microsoft 365 Copilot adoption among large enterprises. The same piece cited Morningstar analyst Dan Romanoff, who argued Azure’s advantages and Microsoft’s OpenAI-linked positioning have helped it emerge as a leader in AI. ^[16]

For investors, the core near-term question is straightforward: can Microsoft (and its mega-cap peers) keep spending heavily on AI infrastructure while demonstrating enough incremental revenue and margin resilience to justify it?

Big picture forecasts: 2026 optimism is real, but the “mega-cap dependency” risk is rising

Even with the market’s strong multi-year run, strategists are not universally calling an immediate peak.

MarketWatch reports that FactSet’s compilation of analyst forecasts implies an average S&P 500 year-end 2026 target “just shy of 8,000,” suggesting meaningful upside from current levels. But it also flags the historical pattern: after rare streaks of strong annual gains, subsequent-year returns have often been more muted on average. And it highlights a key vulnerability—overreliance on AI-driven mega-cap tech. ^[17]

This sets up a 2026 narrative that could feel like a tug-of-war:

• Bull case: AI investment continues, earnings growth delivers, and market leadership broadens.
• Bear case: capex outpaces monetization, or regulation/competition compresses margins—forcing multiple compression in the biggest index weights.

What investors should know before the next U.S. session opens

Because the stock exchange is closed today, the next actionable window for Big Tech investors is the run-up to Monday’s open (Dec. 29):

• Expect “thin tape” volatility. Reuters warned that year-end adjustments and light holiday trading volumes can exaggerate price moves—especially in crowded mega-cap names. ^[18]
• Keep Tuesday (Dec. 30) on your calendar for Fed minutes. Rate expectations remain a key driver of mega-cap tech multiples. ^[19]
• Watch for continued market rotation. Tech’s relative underperformance since early November, alongside strength in other sectors, is one of the most important positioning signals into 2026. ^[20]
• Track the AI sentiment barometers: Nvidia’s deal scrutiny (and rebuttals) and the broader debate over AI “payback” can swing the whole complex quickly. ^[21]
• Don’t ignore regulation headlines. From robotaxi teleoperation standards (Alphabet/Waymo) to drone delivery frameworks (Amazon), regulatory friction is increasingly a valuation variable for Big Tech’s next growth chapters. ^[22]

Paul Nolte of Murphy & Sylvest Wealth Management summed up the mood in Reuters: “Momentum is certainly on the side of the bulls.” But as Big Tech stocks head into the final sessions of 2025, the market is also demanding something more specific than momentum—proof that the biggest AI bets can compound into sustainable cash flow. ^[23]

References

1. www.reuters.com, 2. www.reuters.com, 3. www.reuters.com, 4. www.marketwatch.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.theguardian.com, 8. www.theguardian.com, 9. www.wsj.com, 10. www.nasdaq.com, 11. www.barrons.com, 12. www.reuters.com, 13. www.reuters.com, 14. www.businessinsider.com, 15. www.reuters.com, 16. www.nasdaq.com, 17. www.marketwatch.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.theguardian.com, 22. www.reuters.com, 23. www.reuters.com