What are the “Magnificent Seven” stocks? They are seven companies that rejuvenated the hype in the tech industry and created an even bigger buzz around artificial intelligence (AI). Those seven stocks are Amazon, Apple, Alphabet (Google), Facebook (Meta), Microsoft, Nvidia and Tesla.
In 2023, the Magnificent Seven stocks crushed the market and outperformed major stock indexes. One reason for this result is the global hype behind AI. ChatGPT and other applications opened everyone’s eyes to the potential behind this technology.
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Magnificent Seven Stocks List
Each magnificent seven stocks has outperformed major stock indexes such as the DJIA, S&P 500, and Nasdaq Composite. These megacaps are trading near or at all-time high prices, and the hype around their AI aspirations could lead them even higher. There are many upcoming catalysts for all these stocks, making it one of the market’s most interesting and innovative industries. Let’s find out more about the Magnificent Seven stocks.
Before getting into the Magnificent Seven stocks, let’s look at an unexpected catalyst that will hugely impact one of these stocks, Microsoft. Friday, November 17th, Open AI’s board stunned the tech and AI world by firing its CEO and co-founder, Sam Altman. Open AI is behind the revolutionary ChatGPT application.
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1. Amazon (NASDAQ: AMZN)
First on our Magnificent Seven stocks list is Amazon. Earlier this year, Amazon launched its large language model (LLM) called Titan (code-named Olympus) to compete with ChatGPT.
Amazon is investing huge sums in this LLM and integrating it into its Amazon Web Services (AWS) platform. Beyond AI, Amazon is also planning to sell cars online. Hyundai will be the first brand available in 2024, and others will likely follow suit.
The company is also launching its supply chain. Amazon is also cutting thousands of jobs and saving more money than ever. Its stock is well-positioned to perform well in the coming months and years.
2. Apple (NASDAQ: AAPL)
Apple lags behind its peers in AI news and developments among the Magnificent Seven stocks group. However, many OS, iPhone, and Mac upgrades hint that some major news will be available soon.
The company has already introduced its Apple Vision Pro, which looks miles ahead of any other AR headsets and will be available in the US in 2024.
Apple has often built everything themselves. The company wants to compete with major chip companies and introduce custom-made M3 chips. Until we have more information about their AI plans, this is one of the most exciting news for Apple.
3. Alphabet (NASDAQ: GOOGL)
Up next on our Magnificent Seven Stocks list is $GOOGL. Alphabet already uses AI in many existing applications, such as advertisements and Google Cloud. More than 75% of Alphabet’s revenue comes from its ad segment, and 80% of its users already use its AI products.
Google is also developing a chatbot version of ChatGPT called Bard. After a few mishaps, the app seems to perform better but is still far behind more advanced models.
The company seeks to invest an important sum into Character.AI to train its model further and implement it on its Chromebooks, Pixel phones, and other applications.
4. Meta Platforms (NASDAQ: META)
We have to Include Meta in our Magnificent Seven stocks. Meta (Facebook) was one of the first companies to unveil its desire to implement AI and AR in its business by spending billions and changing its stock symbol.
The stock market’s initial response was very negative, and the company’s stock price fell by over 75% in the next 12 months. However, since November 2022, the stock is up over 270%.
What are Meta’s latest AI innovations? It released AI stickers and image-editing tools on its platforms (Facebook, WhatsApp and Instagram). It’s also introducing Meta AI in beta on all apps, Ray-Ban smart glasses, and Quest 3, giving real-time information and generating images from text prompts. Many of its apps are still in beta and available exclusively in the US, but this should change relatively soon.
5. Microsoft (NASDAQ: MSFT)
We briefly discussed the importance of Microsoft’s partnership with Sam Altman and Open AI. The company is looking to implement this technology on its platforms. One way is to challenge Google by capturing some market share with Bing (currently under 10%).
The company recently finalized its acquisition of video game giant Activision Blizzard and is looking to add an LLM model to NPC prompts, making gaming much more interactive.
Microsoft also follows in Apple’s footsteps by making its custom AI chips. The company’s developments are very interesting and could make it one of the top market gainers in the following years, which is why they’re included in the Magnificent Seven stocks.
6. Nvidia (NASDAQ: NVDA)
Earlier this year, Nvidia joined the trillion-dollar market cap club by more than tripling its stock price. Nvidia’s most recent quarterly statement was eye-opening as its revenue tripled thanks to a booming AI chip market.
However, the company is raising growth sustainability concerns because of export restrictions to China, one of the world’s leading AI chip users, and other countries.
The following year, Nvidia expects revenue to keep growing despite these restrictions. Its server farm revenue is part of this growth. The company is also introducing more advanced AI chips and can keep up with manufacturing deadlines. Nvidia is one of the most exciting AI stocks to watch.
7. Tesla (NASDAQ: TSLA)
We conclude this list with Tesla and, more importantly, Elon Musk. Many investors keep a closer eye on its CEO rather than on Tesla’s technical and fundamental analysis.
In July, Musk launched his own AI company called xAI. He is looking to develop a more ‘’truth-seeking” ChatGPT. Think of it as X (Twitter) meets ChatGPT.
If this company is successful, it will improve the many AI functionalities on Tesla models and its autonomous driving capabilities. It’s hard to predict Musk’s next move, but many investors believe in his capabilities as he keeps delivering Tesla’s results.
Magnificent Seven ($MAGS) TipRanks Stock Forecast Report 3/24
Magnificent Seven Stocks Example
This is a weekly chart of magnificent seven stock Amazon (AMZN). Price is currently at the top of a rising wedge pattern at the 61.8% Fibonacci level. There’s room to move up to $165.14 if the price continues, but it’s overextended. Preceding the rising wedge was a falling wedge pattern. The most recent pattern was a cup and handle breakout. Watch these support and resistance levels to see where price action leads.
Analysts
You might be impressed by the performance of major indexes this year, but it is nothing compared to the Magnificent Seven stocks. Each of them has greatly outperformed the markets and their expectations.
- Amazon: 67.68% gain YTD
- Apple: 52.43% gain YTD
- Alphabet: 53.69% gain YTD
- Meta: 170.15% gain YTD
- Microsoft: 55.72% gain YTD
- Nvidia: 248.89% gain YTD
- Tesla: 123.13% gain YTD
These numbers might look good but be even better in the following months. Many analysts predict their stock prices will keep increasing as they innovate in the AI industry. Let’s look at what each company has already achieved and is working on.
Magnificent Seven Stocks Performance
We are still in the very early stages of development, and any breakthroughs by any of these companies will propel their stock price even higher. Let’s look at their performance YTD compared to major indexes.
Major indexes are very popular for many investors for day trading and long-term investing. They closely follow their daily trends and movements.
In the US, major indexes have performed well this year and rewarded their investors. This includes the Magnificent Seven stocks.
- S&P 500: 18.67% gain YTD
- NASDAQ Composite: 36.71% gain YTD
- DJIA: 5.89% gain YTD
Sam Altman and Microsoft
In the following days, Open AI employees and directors supported Altman by threatening to resign. Many of them have, including the company’s co-founder. A few days later, Microsoft (Open AI’s biggest investor) hired Sam Altman and offered a job to anyone wishing to make the change.
On November 22nd, in a bizarre twist, Open AI’s new board brought back Altman as its CEO. Maybe Microsoft had a say in the matter. We might know more in the upcoming days. Let’s get into the Magnificent Seven stocks.
Final Thoughts: Magnificent Seven Stocks
To conclude, each Magnificent Seven stock should be on your watchlist if they aren’t already. This year’s stock market performance is hard to beat, and their dominance will likely continue.
Amazon, Apple, Alphabet, Meta, Microsoft, Nvidia, and Tesla keep innovating in tech and AI to make their products better than the competition. You can either invest in them individually or buy an ETF (VGT, QQQ, or others) that invests in them.
Frequently Asked Questions
List of the Magnificent 7 Stocks:
- Apple (AAPL),
- Microsoft (MSFT)
- Google parent Alphabet (GOOGL)
- Amazon.com (AMZN)
- Nvidia (NVDA)
- Meta Platforms (META)
- Tesla (TSLA)
List of Significant Stocks (Magnificent 7):
- Apple
- Microsoft
- Alphabet
- Amazon
- Nvidia
- Tesla
- Meta
There is an ETF called Roundhill Magnificent Seven ETF (MAGS).
