KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
The unstoppable ascent of the U.S. tech giants is once again stirring debate — are investors witnessing a new era of sustainable growth, or the quiet inflation of another speculative bubble?
On October 20, 2025, Apple (AAPL) surged nearly 4%, hitting its first record high since December 2024 and reclaiming the No. 2 spot in U.S. market capitalization at US$3.89 trillion, behind Nvidia (NVDA) at US$4.4 trillion. The catalyst: strong iPhone 17 sales, up 14% year-on-year in the first 10 days after launch, igniting hopes of a multi-year replacement cycle.
Historically, Apple’s momentum after breaking new highs has proven durable — shares rose in 10 of 11 such cases over the past four decades, with a median gain of 32% one year later.
Valuations: Elevated but Not Excessive
According to Bloomberg data, most of the “Magnificent 8” — Nvidia, Microsoft, Amazon, Alphabet, and Meta — now trade below their five-year average forward P/E ratios. Apple, Broadcom, and Tesla hover only slightly above their norms.
This stands in contrast to bubble-like periods when valuations detached from fundamentals. Goldman Sachs’ recent analysis notes that, while today’s valuations are elevated, they are still far from dot-com-era extremes — with a median forward P/E of 27x, versus 52x in 2000.
Goldman concludes that today’s rally rests on real profits, robust balance sheets, and concentrated leadership in AI, rather than the debt-fueled exuberance of the past.
Earnings Power Anchors the Rally
Unlike past speculative surges, the tech sector’s fundamentals remain strong:
The Magnificent Seven are forecast to deliver 2025 return on equity (ROE) of 46% and net profit margins of 29%, compared with 16% margins during the dot-com boom.
Nvidia’s earnings have risen in tandem with its stock price, supported by AI chip demand.
Apple’s steady cash flows and iPhone upgrade cycle underpin valuation resilience.
Bank of America adds that analyst revisions have held steady for the first time in two years — signaling earnings confidence rather than complacency.
Risks: Capital Intensity and Market Concentration
Still, the rally carries warning signs. Goldman flags record-high capital expenditures among hyperscalers — expected to hit US$239 billion in 2024, more than double 2018 levels. Such investment surges, if unchecked, risk leading to overcapacity and diminishing returns, similar to the telecom bust of the late 1990s.
Market concentration is another pressure point: just a handful of mega-caps now account for a disproportionate share of S&P 500 gains.
Yet, a critical difference from past bubbles lies in funding discipline — tech giants are largely financing growth through internal cash flows, not debt. The sector’s net debt-to-equity ratio stands at -22%, with cash holdings at 2.7% of market cap, providing ample shock absorption.
Investor Takeaway
Today’s tech valuations may look stretched, but the earnings base is stronger than ever. AI-driven investment, robust cash reserves, and consistent profit growth suggest a market led by fundamentals, not froth.
Still, investors should watch for signs of overextension — surging capex, narrowing breadth, and creeping leverage could be early warnings that momentum is outpacing reality.
For now, the data leans toward strength over speculation — but as history shows, even the strongest rallies can stumble when expectations run too far ahead of earnings.
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