US "Seven Giants" have a poor start in 2026, and the market is expected to remain volatile in the short term.

Under the dual impact of conflicts within GEO Group Inc and industry uncertainty, technology stocks have a slow start in 2026, with the market generally expecting a continued volatile pattern in the short term. Data shows that the Nasdaq fell by approximately 7.1% in the first quarter, marking the largest quarterly decline in a year. Large technology stocks across the board weakened, with all "Seven Tech Giants" recording declines. Among them, Microsoft Corporation (MSFT.US) fell by 23%, marking the worst quarterly performance since 2008; Meta Platforms (META.US) dropped by 13%, the worst quarterly performance since 2022. Even the relatively best performing NVIDIA Corporation (NVDA.US) still dropped by 6.5% in the first quarter. Market analysis believes that the Middle East conflict, especially the situation in Iran, is one of the important factors weighing down on technology stocks. The surge in oil prices has hit investor risk appetite, leading to capital being withdrawn from high-growth technology stocks. Meanwhile, the rise in energy prices may keep inflation high, thereby limiting the downward space for interest rates, putting pressure on the valuation of growth stocks. Tom Essaye, founder of Sevens Report, pointed out that the impact of the conflict is not only seen in the energy sector but may also weaken Middle Eastern capital's willingness to invest in AI companies, especially those from regions like the UAE and Saudi Arabia. Despite the Nasdaq rising by more than 1% on Wednesday, showing market expectations for the end of the conflict, technology sector still faces internal challenges even if the risk from GEO Group Inc eases. The scale of investment in artificial intelligence has become a focus of the market. Tech giants such as Alphabet (GOOG.US, GOOGL.US), Amazon.com, Inc. (AMZN.US), Meta (META.US), and Microsoft Corporation (MSFT.US) are investing billions of dollars in building AI infrastructure. However, with the commercialization path of AI not yet clear, this high investment is squeezing free cash flow and raising risk levels, leading the market to reassess their valuations. Analysts point out that the market hopes to see more concrete AI application cases, rather than just technological visions. At the current stage, investors are more concerned with whether the short-term demand for AI is sufficient to support expensive data center construction. At the industry level, the demand for AI computing power remains strong. Chip companies such as NVIDIA Corporation and storage manufacturers have all indicated that demand still exceeds supply, but the market expects this demand to be reflected in cloud computing revenue. Looking ahead, there is still potential for recovery in technology stocks. FactSet data shows that the target prices for the "Seven Tech Giants" are generally higher than their current stock prices. For example, the average target price for Apple Inc. (AAPL.US) is around $297.97, which represents about a 17% upside from the latest closing price; Tesla, Inc. (TSLA.US) has a target price of around $410.63, corresponding to about a 7% upside potential.