The stock market rally can continue even without the mega-cap tech stocks, a top Charles Schwab expert said Monday.
Seven major tech stocks — Nvidia, Meta, Apple, Amazon, Microsoft, Alphabet and Tesla — have led the months-long stock market rally, accounting for nearly 30% of the S&P 500 index at year-end 2023.
While not referencing this so-called Magnificent 7 group specifically, Joe Mazzola, Schwab's director of trading services education, suggested on CNBC's "Squawk Box" that the stock market boom can persist without the mega-caps.
Schwab sees that its investors have shifted a bit more toward "the chips," he said. "So the big guys that we saw" — Nvidia, Advanced Micro Devices, Super Micro Computer, Arm Holdings — "they're trying to ride that momentum, that AI momentum. How long that lasts we'll see, but they've been successful so far."
Schwab clients are long, buying dips, buying equities but they're not "levering up" through activities like dipping into margins, buying levered ETFs or engaging in high call activity in the options market, Mazzola said.
