Key takeout
The technology sector and big growth stocks were the biggest winners of the second quarter. AIGiantsNvidia, Microsoft, and Broadcom were key individual contributors.
Big Tech returned to the driver’s seat when the stock market folded rar in the second quarter. After a 9.8% drop in the first week of the quarter, the US stock market rebounded to boost the quarter, led by the Artificial Intelligence Giants nvidia by 11.1%. NVDAMicrosoft msftand Broadcom avgo.
Of the 11.1% return Morning Star US Market Index6.7% points came from the technology sector. This added 1.7% points four times, of the amount added by the next biggest contributor, the communications service. Morningstar US Technology Index We won 22.0% in the quarter – postponing stock market returns, Morningstar US Communication Services Index We won 18.8%. Both sectors recorded negative returns in the first quarter, but the year is still up this year.
Other notable contributors were consumer circulars with an additional 1.3 points and industries with an additional 1.2 points. The main drug in the market was healthcare, which undermined 0.7 points.
I’m watching the nine Morning Star Style Box Category, the big growth made the biggest contribution at 4.9% points, while the big blend had the second largest contribution at 3.4 points. Morningstar US Major Growth Index Although it won 23.1% in the quarter, Morningstar US Large Core Index I won 9.0%. The worst performance was a great deal, earning just 0.9%.
AI stocks second quarter lead market performance
Drilling into the second quarter’s biggest winners, high-tech and large-growth stocks, a common thread appears. Several major players taking advantage of artificial intelligence hype continued to carry the market.
Top 5 Contributors, Nvidia, Microsoft, Broadcom, Meta Platform Metaand Amazon amzn– Competing to account for 6.1 of the 11.1% points earned by the US stock market in the second quarter, it currently holds 20% weight on the index.
Nvidia surged 45.8%, accounting for 5.7% of the market index, accounting for only 2.2% points. Following the company’s first quarter revenue report in May, Morningstar Equity StrategistBrian Corrello “Even though it is blocked from selling NVIDIA’s H20 products (custom-built for the Chinese artificial intelligence market), it is still encouraged by Nvidia’s revenue growth. This has generated $2.5 billion and $8 billion in stock depreciation and budget revenue in the quarter and quarter, respectively.”
Colello continues. “We are increasing Wide-Moat Nvidia’s fair value estimate to $140 per share as Blackwell Supply (and Revenue) should expand faster than expected and support long-term AI revenue.”
Microsoft, which holds its largest weight at 6.2% in the index, rose 32.8% in the first quarter, adding 1.7 points to market returns. Morningstar Senior Analyst following the company’s first quarter revenue call in April and Romanov “The results are excellent across the board and against estimates for the top and bottom lines. All segments’ revenues exceeded the high end of guidance. Critical, we see very impressive performance within azure, with traditional artificial intelligence workloads.”
Romanov continues. “The overall guidance is impressive in this environment. Microsoft has provided superior guidance at the top and bottom, including revenues of $73.7 billion, an operating margin of 43.4% and earnings per share at the midpoint of $3.34%.”
Zoom out and see the top 15 contributors of market returns, only four stocks, i.e. netflix NFLX,jpmorgan JPMGe Vernova GEVand ge aerospace ge– Unknown for their AI skills.
Second quarter of healthcare, energy and apple Struggle
Of the 11 US sector indices, energy, which fell 7.7%, fell 6.1%, suffered the most in the second quarter.
Analysts say health care Cheapest price in 5 yearsfaces major headwinds from policy concerns, including President Trump’s intention to lower US drug prices. Two of the 5 biggest drugs in the market – UnitedHealth Group UNH and Abbabby abbv– Healthcare stocks.
UnitedHealth, which plummeted 40.0% in the second quarter and undermined 0.4 percentage points from market returns, faces a set-off from scrutiny on some of its business practices. May Morning Star Senior Equity Analyst Julie Atterbach “The Centers for Medicare and Medicaid Services have announced plans to increase regulations on the Medicare Advantage market for overpayment to private insurance companies like UnitedHealth.
Energy Stock I’m facing my own headwind Due to falling oil prices and lower economic conditions. Exxon Mobil xomdown 8.5% in the second quarter, Chevron CVX13.4% decrease, Conoco Phillips Policemanloses 13.8%, and everything falls into the top 15 detractors from market returns.
The major drugs in the market were neither healthcare nor energy stocks, but instead were one of the biggest tech stocks. aapl. With the US market index weighing 5.4%, Apple reduced 7.5% in the second quarter, eroding 0.5% points from market profits. Following the company’s first quarter revenue report, Morning Star Senior Equity Analyst William Kerwin “While the outcome and revenue guidance was positive for us, the margin guidance is weak and is attributable to an estimated $900 million impact from US tariffs. As a hardware company, we see significant risks for Apple from tariffs, both profitability and long-term demand.”
