The U.S. stock market has shown impressive resilience so far in 2025, with both the S&P 500 and Nasdaq Composite Index posting notable year-to-date gains. As of September 26, S&P 500 and Nasdaq Composite Index has witnessed return of around 13%* and about 16%* respectively.
This performance has been supported by solid sector contributions, steady consumer activity, and easing inflationary pressures. Investor confidence has also been buoyed by expectations of potential Federal Reserve rate cuts in 2026, which have lifted equity valuations and attracted capital into growth-oriented sectors.
U.S. Technology Sector Boom
Among these, the technology sector, in particular, has continued to outperform broader indices, with a year-to-date growth of roughly 22.5%, outpacing the broader market indices.
This growth is driven by year-to-date performance of Western Digital Corp (+193%), Seagate Technology (+193%), Palantir Technologies Inc. (+128.8%), Micron Technology (+123.2%) and AppLovin Corporation (+110.8%). The growth is mainly fuelled by ongoing advances in artificial intelligence, cloud computing, and semiconductor technology.
This compares favourably with notable U.S. technology benchmarks, where the iShares U.S. Technology ETF gained 22.6% and the Vanguard Information Technology Index Fund ETF Shares a 21.5% increase.
According to HSBC estimates, in 2025, U.S. Big Tech giants are ramping up capital spending, largely fuelled by accelerating AI investments. Microsoft reported FY25 capital expenditure of $88.7 billion, surpassing its $80 billion guidance, mainly due to expanded AI data center infrastructure. For the September 2026 quarter, it projects another $30 billion in spending, topping market forecasts.
Meanwhile, Meta lifted its FY25 capital expenditure outlook to $66–$72 billion, up sharply from $39 billion in FY24, with a similar pace anticipated for FY26. Alphabet also revised its FY25 guidance upward to $85 billion from $75 billion previously, following $52.5 billion in FY24. Meanwhile, Amazon’s capital expenditure is expected to reach $118 billion in 2025, compared with $83 billion the prior year.
Other Recent Key Developments in Tech Industry
- Nvidia is teaming up with OpenAI on AI infrastructure, potentially investing $100 billion in GPU-powered data centers, reinforcing its leadership in AI computing.
- Intel is exploring a stake from Apple to bolster its semiconductor position and strengthen collaboration with one of its largest clients.
- Early positive reception of Apple iPhone 17 boosted the company’s shares, with analysts anticipating a new upgrade cycle and AI integration in future devices.
- TikTok’s algorithm will be licensed to a U.S. joint venture led by Oracle and Silver Lake, keeping ByteDance as a minority owner while ensuring U.S. data governance.
- The U.S. government disclosed an increase in H-1B Visa Fees to $100,000 per visa, which is expected to lower labor costs for tech firms reliant on skilled foreign workers, potentially affecting hiring and margins.
Implications for GCC ETFs
Several major exchange-traded funds (ETFs) listed in UAE and Saudi Arabia offer exposure to these tech giants.
Chimera S&P US Shariah Growth ETF: Chimera S&P US Shariah Growth ETF is heavily weighted toward high-growth technology names, consistent with its Shariah-compliant growth strategy. The fund’s largest positions include Nvidia, Microsoft, Apple, Amazon, and Meta Platforms, with the Technology sector accounting for more than half of the index’s total allocation. Year-to-date (as of September 25), the fund saw a YTD annualized return of +12%, which, along with 1-Year total gains of over 20%, indicates a robust rebound and sustained growth.
Albilad MSCI US Tech ETF: This Saudi-listed fund provides targeted exposure to leading American technology companies such as Nvidia and Broadcom, tapping into growth areas such as AI, semiconductors, and software. Year-to-date (as of September 25), the fund has delivered a return of about 20%, along with 1-Year total gains around 35%.
The growing availability of Albilad and Chimera U.S.-focused ETFs in GCC markets reflects rising regional demand for international diversification, particularly toward technology-led growth themes.
Looking Forward
U.S. equities are positioned for continued expansion, with the technology sector expected to remain a key growth driver. Long-term themes such as AI adoption, cybersecurity, and advanced connectivity are expected to sustain earnings growth. Additionally, government support for domestic semiconductor production, digital infrastructure expansion, and the clean energy transition is projected to provide further tailwinds.
As per HSBC report, the “Magnificent Seven” stocks (Amazon, Apple, Alphabet, Tesla, Microsoft, Meta, NVIDIA) are expected to generate about $900 billion in operating cash flow in 2025, backed by roughly $200 billion in net cash as of mid-year. Capital spending dominates their allocation plans (45%, or $414 billion), driven by AI-related investments.
According to PwC, artificial intelligence could add as much as $15.7 trillion to the global economy by 2030. The Middle East is projected to capture around 2% of this value — roughly $320 billion — highlighting the region’s growing role in the global AI landscape.
Saudi Arabia is expected to see the highest absolute economic gains from AI, with the technology projected to add over $135 billion to its economy by 2030 (about 12.4% of GDP). In relative terms, the UAE is expected to experience the greatest impact, with AI contributing nearly 14% of its GDP by the same year. Across the region, AI’s economic contribution is anticipated to grow by 20%–34% annually, led by rapid expansion in the UAE and Saudi Arabia.
In conclusion, with AI and digital infrastructure shaping the next wave of growth, the technology sector remains central to the country’s equity performance. For GCC investors, the Albilad US Tech ETF and Chimera’s U.S. and U.S. Tech ETFs provide practical tools to capture this momentum, offering both targeted and broad exposure to one of the world’s most dynamic investment landscapes.
*Data sources: S&P 500, Barron’s, Google Finance, company press releases, HSBC, PwC reports
