According to Goldman Sachs, as of late November, the Magnificent Seven had climbed 71% year-to-date, compared to a 6% increase for the rest of the S&P 500. The group is expected to continue outperforming the rest of the index due to their significant earnings potential from AI. Nvidia dominates the GPU market, Microsoft has partnered with OpenAI, and Google recently made its Gemini AI model available to companies. Other members like Apple and Amazon are also considering increasing their AI investments.
Key takeaways:
- The 'Magnificent Seven' Big Tech stocks, including Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla, dominated the market in 2023, accounting for around three-quarters of the S&P 500's total gains.
- Nvidia saw a 240% surge, reaching a $1 trillion valuation for the first time, while Meta and Tesla also posted triple-digit returns.
- Analysts predict that these mega-cap tech stocks will continue to outperform the rest of the S&P 500 in 2024, driven by the rise of AI and potential Federal Reserve interest-rate cuts.
- These tech giants are expected to benefit significantly from AI, with Nvidia dominating the GPU market, Microsoft partnering with OpenAI, and Google making its Gemini AI model available to companies.