In a research note last week, wealth managers highlighted that the Magnificent 7 returned an incredible revenue growth of 107% over 2023.
The US earnings season has been slightly more positive than its European counterpart, primarily driven by the “Magnificent 7” tech stocks – Amazon, Apple, Alphabet, Meta, Microsoft, Tesla, and most importantly Nvidia. These tech giants’ market value accounts for roughly 30% of the S&P 500, with the remaining 493 stocks only accounting for 70% of it.
The reason behind the Magnificent 7’s thriving earnings season is the continued excitement around AI. With most of the seven stocks showing significant focus on this technology, there’s high demand for their products and services, and that’s translated to strong earnings. Nvidia especially has a stronghold on the development of chips used for AI technology. However, “the fate of the Mag 7 depends on their ability to deliver rapid revenue growth in 2024” says Goldman Sachs.
