Pettit said mega-cap technology stocks remain stronger because earnings revisions are still robust. The Mag Seven ETF has reached new highs, helped by strong company-specific developments involving Meta, Google and other large technology names.
He recommended a barbell approach that combines large-cap growth exposure through funds such as VUG, IWF and IVW with “halo stocks, ” which he described as hard-asset companies with low obsolescence and improving revision trends. In his view, those holdings can complement large-cap growth and help investors navigate uncertainty without replacing its gains.
Pettit rejected comparisons with the two-speed market of 1999 and said market conditions are more efficient at the individual-stock level than broad economic and index performance may suggest. He said large-cap artificial-intelligence and mega-cap growth companies have fundamentals supporting their valuations, while rate-sensitive small caps face weak revisions and are not especially cheap.