Magnificent Seven: can they continue to dominate in 2024?
The Magnificent Seven – Apple, Alphabet, Amazon, NVIDIA, Microsoft, Meta Platforms, Tesla – individually soared between around 50% and 240% in 2023. But are they still a buy? Should you cherry pick, or are they looking risky?
(AI Video Summary)
The outlook of the Magnificent Seven in 2024
In 2023, a group of seven influential companies, known as the Magnificent Seven, had a big impact on the market. These companies include Microsoft, Meta Platforms, Tesla, Apple, Alphabet, Amazon, and NVIDIA. Now, after their earnings reports, investors are wondering if these companies are still a good investment.
Amazon
Let's start with Amazon. Their shares went up after a strong performance in the December quarter. They surpassed revenue expectations, especially in online spending during the important holiday season.
Alphabet
On the other hand, Alphabet, the parent company of Google, disappointed investors with lower sales than expected in holiday season advertising. They also announced that they would be spending more on AI infrastructure, which raised concerns about costs.
Microsoft
Microsoft did better than expected in terms of profit and revenue. However, investors started to question whether the money they were putting into AI would pay off in the long run. Despite that, Microsoft's new AI features have been attracting customers to their Azure cloud services.
Meta
Meanwhile, Facebook reached a record high in its stock price and is now valued at around $1.1 trillion. Their revenue also increased by 25% due to strong advertising and device sales.
Apple
Apple had some challenges in China as their sales in the country fell short of estimates. This disappointment caused a decline in Apple's stock price. They also faced tough competition in China as they released their Vision Pro.
Tesla
Lastly, Tesla had a major setback. Their shares dropped to the lowest point in eight months, leading to a loss of about $80 billion in market value. This drop came after Elon Musk warned of slower growth in 2024.
In conclusion
Given these circumstances, investors might choose to take their profits and diversify their investments. However, some argue that these companies have become safe bets because of their large size, making them less likely to fail. Ultimately, the decision to buy, hold, or sell stocks from these companies depends on each individual's perspective and investment strategy.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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