He favors small-cap, mid-cap, and quality stocks over the Big Tech mega-caps leading the market rally for three reasons. One is that the earnings winning streak that Magnificent Seven stocks have enjoyed is simply difficult to keep going. In the first quarter of this year, Magnificent Seven earnings grew by 50% annualized year-over-year, according to Ned Davis Research. Wall Street estimates Magnificent Seven earnings will grow by 28% year-over-year in Q2. When it comes to innovating and adapting, small and mid-cap companies' size gives them a relative advantage.

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Persons: —, Larry Kochard, Ned Davis, Kochard, reinvesting, It's, it's Organizations: Service, Big Tech, Capital Management, Business, Ned Davis Research, Wall, The, Apple, Google, Microsoft, Nvidia, European Union, Quality