Technology stocks, particularly the so-called “Fabulous Seven” of the US tech industry (Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla), have suffered significant losses since the beginning of 2025. This development is largely influenced by uncertainty in trade, exacerbated by the US’s customs policy and the resultant counter-tariffs from the EU and China.
Causes of the Downward Trend
Customs Conflict: The announcement of new tariffs by US President Donald Trump has led to significant uncertainty in the markets. These tariffs affect all exporters and have particularly negatively impacted technology stocks.
Market Uncertainty: Investor nervousness is clearly noticeable as the effects of the customs policy are hard to predict. Many investors are standing by and avoiding larger risks.
Earnings Expectations: Earnings expectations for the technology sector have deteriorated, leading to a rapid pricing in of anticipated demand dampeners.
Impact on the Real Economy
Consumer Behavior: The devaluation of stock assets can influence consumer behavior, as consumers tend to spend less in times of uncertainty.
Corporate Investments: Companies may hold back on investments, which could delay economic recovery.
Berkshire Hathaway as a Glimmer of Hope
Berkshire Hathaway, the only company in the trillion-dollar club, has developed positively in contrast to technology stocks. This development makes Berkshire Hathaway an exception in the current market environment.
Reasons for the Success of Berkshire Hathaway
Diversification: Berkshire Hathaway has a broadly diversified portfolio that not only focuses on technology but also invests in other industries. This diversification protects the company from industry-specific difficulties.
Long-Term Strategy: Berkshire Hathaway is known for its long-term investment strategy that focuses on stable and sustainable values. This strategy can provide advantages in turbulent market phases.
Stable Cash Flows: Many of the companies held by Berkshire Hathaway generate stable cash flows, allowing the company to invest even in difficult times.
Overall, Berkshire Hathaway demonstrates that a diversified and long-term oriented investment strategy can also be successful in uncertain market conditions.