LINKS MARKED * ARE AFFILIATE LINKS.
If you’re new to investing you may have come across a term used by investors on Bloomberg or other finance news channels… The Magnificent Seven! But who are the Magnificent 7? Let’s explain.
Who are the Magnificent 7?
The Magnificent 7 are a group of tech stocks that dominate the stock market and have generated huge growth over recent years. A lot of this is due to the change they have enacted on consumer demand and behaviour. With a combined market cap of more than $16 trillion dollars at the time of writing, these companies can really impact the major stock indexes.
As we list the Magnificent 7 companies below, I doubt there will be many names you don’t recognise.
1) NVIDIA – NVDA
Until a few years ago, most people will have only recognised the name Nvidia due to their prominence in the world of computer chips and graphics cards. Nowadays, though, Nvidia is a market leader in the world of Artificial Intelligence or AI. With a market cap of $3.1 trillion, its value is now similar to the likes of Apple and Microsoft! One example of this is that Nvidia make the chips that enable programs like ChatGPT to learn and develop. There is an also a huge demand for supercomputers right now, which has increased the demand for Nvidia hardware. With this demand likely to grow into a multi trillion dollar field, the future looks bright for Nvidia. As long as it can fend off its competitors, it looks likely to remain one of the Magnificent 7.
2) Alphabet – GOOG
Now for the first of 3 companies listed in the Magnificent 7 whose name begins with the letter A… Alphabet. If you’re just starting out investing, then this name might sound a little unfamiliar. Alphabet is a parent company created by Google to house all of its companies under one umbrella. These comaines include not just its search engine and all of Google’s advertising revenues, but also companies like YouTube, DoubleClick, Nest, Fitbit and others. Google changed the way we use the internet and is still the dominant player in global search. With YouTube dominating the world of online video consumption, Alphabet more than deserves its place in the list of the Magnificent 7 stocks. Alphabet currently has a Market cap of over $2 Trillion.
3) Amazon – AMZN
If Google changed the way we used the internet then Amazon definitely changed the way we shop. Not just shop online either but shop in general. Amazon started out as an online bookseller but they didn’t really intend to stay that way. Right from the start it was apparent that Amazon wanted to reinvest almost all of its profits to fund branching out into different industries. These days there are not many things you can’t buy on Amazon. In fact, there was talk recently that they were even going to be selling cars. This has meant that this online retailer – started by Jeff Bezos in his garage – has now grown into one of the maginficent 7 stocks. In fact, Amazon now has a market cap now in excess of $2 trillion dollars!
4) Apple – AAPL
In Apple we come to a company that really needs no introduction… but we’ll give it a little one. Founded by the late Steve Jobs and Wozniak, Apple revolutionised the smartphone. Apple also introduced other devices to the market that are now a staple of modern life. The iPad, iPhone, airpods and of course the Mac computer are just some of these products. Apple has an almost cult-like following who also use many of the digital services offered by the company. This has led it to go tit for tat with Microsoft, competing in value and occasionally trading places with the other in which has the biggest market cap in the world. At the time of writing, Apple is winning this war by some margin. With a total market cap of almost $3.5 trillion Apple is the world’s most valuable company.
5) Microsoft – MSFT
This would be a good place to introduce Microsoft to our Magnificent 7 list. Currently the world’s second largest company by market cap at around $3.2 trillion, pretty much all of us will have owned or used a computer in our lifetime with Windows software on it. Microsoft’s legendary founder Bill Gates was portrayed – and probably was – the polar opposite to Apple’s founder Steve Jobs. Yet the two of them engaged in a race for technological dominance over the decades. Nowadays, Microsoft’s biggest revenue stream actually comes from its intelligent cloud business. Microsoft also has a huge investment in AI and it has recently worked closely with NVIDIA in this sector.
6) Tesla – TSLA
With a current Market cap of $761 Billion, Tesla is currently 12th on the list of the world’s biggest companies by market cap. The Magnificent 7 companies are not just about market cap, though, it is also about innovation. On this front, it’s fair to say that Tesla and its founder Elon Musk – who also famously founded and sold PayPal – has revolutionised the electric car market. Tesla may have dropped off in market cap from a peak of over $1 trillion dollars, but things do seem to be steadying out for them. Let’s face it, they are only really one extremely successful model launch away from rising close to the top of the market cap list once again.
7) Meta – META
Last but not least on our Magnificent 7 stocks list is Meta. Like Alphabet is for Google, Meta is a parent company created by Facebook founder Mark Zuckerberg to house all of the companies now operating under Meta. These include names such as Facebook, Instagram, Messenger, WhatsApp and Oculus. With the Metaverse and Virtual Reality now growing in popularity the future also looks bright for Meta. That being said, the family of apps listed above and the advertising revenues they generate still account for the vast majority of Meta’s revenue. This leads to it’s current Market cap of around $1.4 Trillion.
Are you invested in any of the Magnificent 7? Let us know why in the comments.
