Catenaa, Monday, August 12, 2025- Long Magnificent 7 stocks have been the most crowded trade in August as upbeat earnings and improved sentiment towards the global economy send investors back into stocks.
According to a survey done by Bank of America, 45% of the 169 participants, who have $413 billion in assets under management, said they thought the most crowded trade was “long Magnificent 7”, a group of large US tech stocks, including Nvidia and Microsoft.
Strong earnings have helped big tech stocks to bounce back sharply since their tariff-induced selloff in April. They were last seen as the most crowded trade in March, the survey, which was released on Monday, showed.
Broad investor sentiment improved in August, with just 5% of asset managers positioning for a hard landing, characterised by a sharp slowdown in economic growth.
A net 14% of those surveyed were overweight global equities, the highest since February, though still down sharply from net 49% overweight in December.
Moreover, about 91% of participants indicated that American stocks are overvalued, the highest ever proportion in data going back to 2001.
While investor allocation to global equities climbed to the highest since February, a net 16% were still underweight the US.
Overall sentiment improved to the most bullish in six months, since before President Donald Trump’s sweeping tariffs roiled financial markets and stoked worries about a recession.
