One Wall Street expert lays out a compelling case for why the sheer and utter dominance of the stock market's tech elite could be on its last legs.
This is another headwind that's also started blowing in the face of mega-cap tech firms.
"Antitrust regulation is slowly catching up on the platform companies," he said."Hipster antitrust goes after large platform companies not for raising prices, but for undercutting their competitors by twisting patent law and coercing employees and suppliers into near-exclusivity agreements."The situation here, as described by Deluard, is a double-edged sword of sorts.
"Index funds are naturally skewed towards the largest companies," he said."However, a sharp market correction would likely trigger rapid outflows from ETFs, which would result in a temporary stretch of underperformance by the tech mega companies."Deluard also highlights something he calls the"winner's curse," which refers to the idea that the largest stocks in the market at a given time tend to underperform.
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