Terms

  1. Home
  2. Terms
  3. Magnificent Seven

Magnificent Seven

The Magnificent Seven is the 7 largest stocks in the S&P500. In addition to being the leading tech stocks, the Magnificent Seven make up more than a quarter of the US market. The cluster features the GAMMA stocks – Google parent Alphabet (GOOGL), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), and Amazon (AMZN) – as well as two new names in Nvidia (NVDA) and Tesla (TSLA). This group has made the S&P 500 more concentrated than ever, which means this key U.S. equity gauge’s further boom or doom depends on these seven stars. So far this year, this group of mega-sized firms are buoying the performance of the U.S. stock market.

S&P

  • In the first half of 2023, the S&P 500 was up about 16.4% mainly due to the big tech rally.

  • Many consider the over-reliance on the Magnificent Seven has made the S&P 500 a susceptible equity gauge.

  • The craze around AI has helped push some of these tech stocks to all-time highs and driven the S&P 500 into a bull market. 


THE WINNING ATTRIBUTES

  1. APPLE - Dominates over half of the U.S. smartphone market along with cloud services, App Store, Apple Music, AppleCare, Apple Pay, and licensing.

  2. MICROSOFT - Dominates the PC software market with more than 73% of the market share for desktop operating systems. Microsoft 365 application suite is one of the most popular productivity software globally.

  3. ALPHABET'S GOOGLE - Has consistently held around 90% of the global monthly internet search share for around a decade.

  4. AMAZON - Holds a commanding lead in U.S. online retail sales being 5x ahead of its nearest rival. Also a leader in cloud computing market: IaaS space.

  5. NVIDIA - At the forefront of the AI boom. A significant 90% of GPUs used in AI-powered data centers come from Nvidia.

  6. META PLATFORMS - The world's largest social media platform. Meta’s family of products is used by almost 3.88 billion people on a monthly basis as of June 30, 2023.

  7. TESLA - The market leader in battery-powered electric car sales in the U.S. with roughly 70% market share.


THE SEVEN GIANTS

  • Nvidia has been the biggest success story from the seven big tech giants in 2023, surging 181% year-to-date.

  • Nvidia and Meta were the best performers not only among the Magnificent Seven, but also among the 600 stocks in the STOXX US index.

  • Meta more than doubled the value of its stock, and Tesla nearly did it as well.

  • Apple, Microsoft, Alphabet and Amazon have all climbed between 35% and 55%, with Apple now on the brink of becoming the first-ever company with a $3 trillion valuation.


RISKS IN INVESTING

  • These tech giants face challenges in safeguarding user privacy, moderating content, and addressing potential antitrust actions. 

  • Big tech companies are currently under intense antitrust scrutiny. Meanwhile, privacy, a complex issue with numerous trade-offs, is progressing slowly on the legislative front.

  • Companies are taking active self-regulatory measures, which can have a more disruptive impact on the industry than government regulations.

Warnings and Disclaimers

The information contained herein is obtained from sources believed to be reliable, but its accuracy cannot be guaranteed. It is not designed to meet your personal financial situation - we are not investment advisors nor do we give personalized investment advice. The opinions expressed herein are those of the publisher and are subject to change without notice. It may become outdated an there is no obligation to update any such information.

Copyright Finnotes.org © 2018 - 2020