Niles Investment’s Dan Niles warns of potential market disappointment later this year

June 12, 2025 07:17 AM PDT | By EODHD

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Niles Investment’s Dan Niles warns of potential market disappointment later this year — Image source: Kalkine Media

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[Crypto diagram with green and red candlesticks on blue display. TradingView.] Arsenii Palivoda The recent strong U.S. GDP performance could lead to market disappointments later this year, particularly during the holiday shopping season, said Dan Niles, Niles Investment Management founder and portfolio manager. In an interview with CNBC, Niles pointed to the 41% increase in imports during the first quarter as evidence of “pulled forward demand,” noting that the U.S. represents 25% of global GDP.

“If that’s not pulled forward in demand, I don’t know what is,” he said, and explained that this advance purchasing is why Q1 results for many companies exceeded expectations, despite revenue estimates being cut for six of the “Magnificent Seven” tech companies (BATS:MAGS [https://seekingalpha.com/symbol/MAGS]) after their Q4 reports. Niles remains bullish in the short term but anticipates a “big disappointment” for consumer electronics companies during the November-December holiday season. He explained that many consumers are accelerating purchases of high-priced goods ahead of potential tariffs, which will likely result in weaker-than-expected holiday sales for companies like Apple (AAPL [https://seekingalpha.com/symbol/AAPL]) that typically generate 30-35% of their revenues during those two months. Among the Magnificent Seven stocks, Niles expressed particular optimism about Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]) and Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]). Regarding Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]), he noted the company’s recovery after a 49% stock decline, citing strong inference demand for AI applications.

Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]) also earned Niles’ approval due to its early 2019 investment in OpenAI and accelerating Azure cloud revenues. “After nine months of disappointment, they’re starting to benefit,” he said, contrasting Microsoft’s (MSFT [https://seekingalpha.com/symbol/MSFT]) 2% revenue acceleration with the deceleration experienced by Google (GOOG [https://seekingalpha.com/symbol/GOOG]), (GOOGL [https://seekingalpha.com/symbol/GOOGL]) and Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]) in the same period. However, Niles cautioned investors about excessive optimism in the face of concerning economic indicators. “You want to believe all that good stuff and not think [that] when you have 25% of the world’s GDP up 41%, in terms of pulling forward demand… [we] might that have an issue later this year.” MORE ON ROUNDHILL BIG TECH ETF: * MAGS: The Correction Reversed, But Big Tech Fundamentals Continue To Deteriorate [https://seekingalpha.com/article/4790633-mags-the-correction-reversed-but-big-tech-fundamentals-continue-to-deteriorate] * Equity Markets React To Trump's Tariff Announcements: The Data [https://seekingalpha.com/article/4786044-equity-markets-react-to-trumps-tariff-announcements-the-data] * MAGS: The End Of An Era (Rating Downgrade) [https://seekingalpha.com/article/4776256-mags-the-end-of-an-era] * This is still the most hated V-shaped rally - Tom Lee [https://seekingalpha.com/news/4457292-this-is-still-the-most-hated-v-shaped-rally-tom-lee] * Retail investors are shifting away from the Mag 7 and towards promising beat-up names – Robinhood [https://seekingalpha.com/news/4455582-retail-investors-are-shifting-away-from-the-mag-7-and-towards-promising-beat-up-names-robinhood]

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