'Magnificent 7' will navigate turbulent waters in 2024

'Magnificent 7' will navigate turbulent waters in 2024

Important point:

  • Nvidia and Meta led the performance of the “Magnificent 7” group in 2023, but Apple and Tesla suffered a decline in their market values ​​in early 2024.
  • Analysts show mixed optimism toward these tech giants, being particularly less favorable toward Tesla and Apple, as well as concerns about their ability to monetize artificial intelligence.
  • Despite current challenges, the market is expected to diversify in 2024, providing investment opportunities in previously underserved regions, while experts maintain a positive long-term outlook for the “Magnificent 7”.

The stock market landscape has been dominated by a group dubbed the “Magnificent 7,” which fueled an impressive market rally in late 2023. However, a change in its performance is seen as early as 2024, presenting a less spectacular scenario. For some of its members.

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Last year’s leaders and challengers

In 2023, Nvidia emerged as the undisputed leader of the group with an impressive 239% increase in its market value, owing to its key role in building artificial intelligence processors. Meta, Tesla and Amazon followed with increases of 194%, 102% and 81% respectively. Even the lowest-performing companies within the group, such as Microsoft, Alphabet and Apple, doubled the S&P 500’s 24% gain with gains of 57%, 58% and 48%, respectively.

A look at 2024: differences and expectations

The new year brings a change in investment dynamics with expectations of a broader and more diverse market. Among the “Magnificent 7”, Apple and Tesla have seen their market values ​​decline, with Tesla seeing a notable decline of 24.4% and Apple falling by 3.5%. On the other hand, Meta and Nvidia continue to lead the group with growth of around 34% each.

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This change has created a certain pessimism toward Tesla and Apple, not only in terms of stock performance but also in analyst confidence. While the rest of the group enjoys purchase recommendation rates between 70% and 85%, Tesla and Apple lag behind with only 29% and 46% purchase recommendations, respectively.

Performance and Forecast

The year-to-date performance table shows a mixed outlook for the “Magnificent 7”, with Meta and Nvidia leading in terms of earnings and EPS growth expectations, while Apple and Tesla face less favorable forecasts, lacking Also includes forecast. Tesla’s profit 20%

Challenges and Strategies

Concerns about Tesla and Apple suggest underlying problems at these companies, particularly in their ability to monetize artificial intelligence. Specific challenges, such as the court ruling against Elon Musk and declining Apple sales in China, have weighed on investor sentiment. Additionally, rating revisions by analysts reflect weak demand and concerns about the growth and valuations of these tech giants.

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Long Term Outlook and Investment Opportunities

Ultimately, despite short-term ups and downs, experts like Yardeni Research’s Ed Yardeni maintain an optimistic long-term outlook for the “Magnificent 7,” highlighting their strong cash flow, innovative leadership and ability to maintain high profit margins. Is. At the same time, investment opportunities are being identified in sectors that did not perform well last year, such as financials, healthcare and energy, suggesting the potential for a “recovery” in the broader market.


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