Magnificent Seven, a 1960 movie about gunfighters liberating Mexican peasants, now fuels Wall Street’s bull market run with seven Nasdaq stocks, ensuring its return remains stable. The ‘Magnificent 7’, a new group of mega-cap tech stocks – Apple, Microsoft, Nvidia, Amazon, Meta, Tesla and Alphabet – have propelled the Nasdaq 100 to clock over 50% in 2023.

Tech giants’ earnings growth, robust cash flow, and AI boom fuelled a nearly 100% rise in the first six months of 2023 amid recession fears.

S&P 500’s Magnificent 7 Stocks Outlook in 2024

APPLE

With a record-breaking nearly 50% increase in 2023, Apple’s market valuation now stands at $3 trillion, more than any other firm in the world.
Its cyclical sales of iPhones and PCs may not rebound until the second half of 2024, and the strength of China’s consumer base will also have an impact on its growth.

In the first week of 2024, Apple’s iPhone sales in China fell by 30%, according to a report from Jefferies analysts. According to Apple, the much-anticipated Vision Pro headset will be available for purchase in the US on February 2.

Microsoft

Microsoft also hit an all-time high this year on optimism about AI and cloud growth after integrating OpenAI’s ChatGPT technology into its products.

Some investors believe it is the best-positioned of the Magnificent Seven to capitalize on AI’s promise.

Aside, the European Commission, the EU’s executive arm, announced a competitive investigation into virtual worlds and generative artificial intelligence. As part of the investigation, the Commission is looking at agreements between internet companies and generative AI developers.
The Commission has singled out the Microsoft-Open AI alliance as a potential merger investigation.

Amazon

Top e-commerce or internet stock for 2024 could turn out to be Amazon. Amazon’s share price has risen by more than 80% in 2023, dating back to October. An earnings beat indicating stable growth in its AWS cloud unit boosted the shares. Amazon is trading considerably below its 2021 closing high of almost $187 per share, giving investors a sense of potential upside.

Amazon’s profit outlook is positive, thanks in part to AI tailwinds. The stock is not pricey concerning its history, it is outperforming expectations, and consensus estimates are rising and that’s the recipe for a bull market, according to many analysts.

Nvidia

Nvidia established its reputation as an AI darling after high demand for its processors drove rapid revenue growth. The stock’s more than 230% climb in 2023 to a new high has made it the best performer in both the S&P 500 and the Nasdaq 100. The chipmaker is expected to experience a significant increase in sales, according to Wall Street’s forecasts for 2025, reflecting high market expectations.

Alphabet

Alphabet, which has grown by more than 60% in 2023, is likely Microsoft’s main competitor in AI and cloud technologies right now. Google’s AI offering, Gemini, is attracting investors seeking higher revenue, with the stock trading at a reasonable valuation, below its record high.

Meta

Meta’s shares have nearly tripled in 2023, with the most bullish Wall Street ratings in its history, and are below their 2021 high. Meta’s multi-year product roadmap, encompassing social, GenAI, and ad tools, is boosting engagement and margins.

Tesla

Tesla’s year has been notably strong, yet its growth has more than doubled, despite analysts’ disbelief in its viability in the electric vehicle market. The stock price is well under its 2021 peak.

Priciest and Cheapest Stock

Meta has a similar valuation as Alphabet, while Tesla, at about 70 times forward earnings, is the priciest. The average for the seven firms is roughly 32. 2024 will be different for these ‘Magnificent 7’ companies or will the momentum continue, remains to be seen.