What are the magnificent 7 stocks of the S&P 500?
The top five companies alone (Microsoft Inc., Apple Inc., Alphabet Inc., Amazon.com Inc and Nvidia Corp.) make up nearly 25% of the market cap of the S&P 500. Add in the next two to make up the Mag 7 and the market cap of these is larger than all the stock markets in the world bar the US.
The top five companies alone (Microsoft Inc., Apple Inc., Alphabet Inc., Amazon.com Inc and Nvidia Corp.) make up nearly 25% of the market cap of the S&P 500. Add in the next two to make up the Mag 7 and the market cap of these is larger than all the stock markets in the world bar the US.
Catch up fast: The Magnificent Seven are Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta. The ranks of the top 10 include Berkshire Hathaway, Eli Lilly and chipmaker Broadcom.
Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla lived up to their name in 2023 with big gains. But the start of 2024 has shown a big divergence of returns.
CNBC's Jim Cramer on Friday reviewed the “Super Seven,” mega cap European stocks Citi recently named as alternatives to the Magnificent Seven, but with lower valuations. The Super Seven are: Novo Nordisk, ASML, LVMH, Richemont, SAP, Schneider Electric and Ferrari.
- Linde plc (NYSE:LIN) 5-Year Share Price Returns as of November 16: 158% ...
- Casella Waste Systems, Inc. (NASDAQ:CWST) ...
- DexCom, Inc. (NASDAQ:DXCM) ...
- Arthur J. Gallagher & Co. ...
- Crocs, Inc. ...
- TFI International Inc. ...
- SPS Commerce, Inc. ...
- Axon Enterprise, Inc.
The so-called Magnificent 7 stocks -- Apple Inc., Amazon.com Inc., Alphabet Inc. Meta Platforms Inc., Microsoft Corp., Nvidia Corp.
Wall Street Also Thinks Alphabet Stock is a Good Buy
Overall, 86% of analysts covering GOOG rate it as either a “Strong Buy” or “Moderate Buy.” Among the Magnificent 7, Meta Platforms, Microsoft, Nvidia, and Amazon are rated higher than GOOG among analysts, while Apple and Tesla are rated lower.
The S&P 500 has a forward price-to-earnings (P/E) ratio of about 15.5x excluding the Magnificent Seven, while the Magnificent Seven has a P/E of about 35x, according to data compiled by FactSet as of January 2, 2024.
The Magnificent 7 stocks are actually undervalued, JPMorgan says. Mega-cap tech leaders look cheap compared to the rest of the S&P 500, JPMorgan says. The group is currently trading less stretched than a few years ago, given earnings delivery.
What is the cheapest magnificent 7 stock?
- Alphabet (Class A shares, GOOGL): 17.83 forward P/E ratio.
- Meta Platforms: 21.56.
- Apple: 23.9.
- Nvidia: 30.43.
- Microsoft: 31.07.
- Amazon: 33.95.
- Tesla: 41.14.
The "Magnificent Seven" stocks of the tech world -- Apple, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon, Meta Platforms, Microsoft, Nvidia (NASDAQ: NVDA), and Tesla -- are a great place to start.
The Magnificent Seven Question
The client was not referring to the 1960 western (which was remade in 2016) but rather to the stocks of seven companies, Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, which have been supercharging the performance of the equity markets lately.
By definition, mega-cap stocks are those which possess a market capitalization above $200 billion.
Back in the late 1990s, we had four mega-cap technology stocks that led the Nasdaq Composite to its all-time high in 2000. They were Microsoft (MSFT), Intel (INTC), Cisco Systems (CSCO) and Dell Computer.
The "Magnificent Seven" stocks of the tech world -- Apple, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Amazon, Meta Platforms, Microsoft, Nvidia (NASDAQ: NVDA), and Tesla -- are a great place to start. These companies are investing heavily in AI and have the brand power to go far in the industry.
We took a look at the best performing S&P 500 stocks over the past five years, with the top three performers being NVIDIA Corporation (NASDAQ:NVDA), Enphase Energy, Inc. (NASDAQ:ENPH), and Enphase Energy, Inc. (NASDAQ:ENPH).
- Microsoft Corporation (MSFT):
- Apple Inc. ...
- NVIDIA Corporation (NVDA):
- Amazon, Inc. ...
- Alphabet Inc. ...
- Comparative Analysis:
- Apple (AAPL) falls somewhere between a growth stock and a value stock.
- Nvidia (NASDAQ: NVDA): Up 239%
- Meta Platforms: Up 194%
- Tesla (NASDAQ: TSLA): Up 102%
- Amazon (NASDAQ: AMZN): Up 81%
- Alphabet: Up 58%
- Microsoft: Up 57%
- Apple: Up 48%
- Alibaba Group. Most investors would probably view Alibaba Group (NYSE: BABA) as a growth stock. ...
- Enterprise Products Partners. Enterprise Products Partners' (NYSE: EPD) forward earnings multiple is below 10.6x. ...
- Pfizer.
What is the best stock to invest in 2024?
- Walt Disney Co. (DIS)
- PDD Holdings Inc. (PDD)
- Occidental Petroleum Corp. (OXY)
- Match Group Inc. (MTCH)
- Grupo Aeroportuario del Sureste SAB de CV (ASR)
- Target Corp. (TGT)
- Pimco 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ)
- Citigroup Inc. (C)
Stocks Warren Buffett is buying
Warren Buffett took advantage of weakness in the energy sector to add to two of his favorite oil stocks at the end of 2023. Shares in Chevron (CVX), the only energy name among Dow Jones stocks, spent much of Q4 trading below $150 a share.
| Company (Ticker) | Forward P/E Ratio |
|---|---|
| Humana (HUM) | 13.9 |
| Fidelity National Information Services (FIS) | 13.4 |
| Citigroup (C) | 8.0 |
| Lear (LEA) | 7.7 |
| Company | Performance (Year) |
|---|---|
| Amazon.com Inc. (AMZN) | 91.97% |
| General Electric Co. (GE) | 91.63% |
| Arista Networks Inc (ANET) | 90.04% |
| KLA Corp. (KLAC) | 89.62% |
An S&P 500 index fund can be used for a high-conviction, long-term bet on U.S. large-cap stocks. Our recommendation for the best overall S&P 500 index fund is the Fidelity 500 Index Fund (FXAIX). With a 0.015% expense ratio, this fund is the cheapest one on our list.
