Bloomberg Surveillance · Friday, July 17, 2026
David Katz notes that the market has seen a rotation this year, with semiconductor companies performing strongly while the 'Mega seven' tech giants like Microsoft and Google experienced a downturn. He expects this rotation to continue, with opportunities to buy into weakness in sectors like semiconductors or to consider buying the Mega seven during their sell-offs. Katz also suggests looking at consumer staples and healthcare, which have underperformed.
“Well, what's happened this year is the hyperscalers, the MAC seven, which had a great year last year, had a horrible six month period and actually we're down three to seven percent. Companies like Microsoft and Google and Amazon and Meta. The flip side is semiconductor companies basically melted up. That was actually the best quarter for semiconductor companies in the second quarter ever, So basically after these huge gains, the stocks are giving back some.”
“Our expectation for the year is a lot of rotation. So you're getting rotations into Semis, out of Semis, into the hyper seeds in the Max seven. Expect that to continue.”
“We think the best way to approach this market is take a longer term view. If you like Semis and they just sold off twenty five percent, you could add into that weakness. We actually think that the Max seven, many of them, the hyperscalers, are going to have a very good back half of the year, so we had been buying into that weakness.”