Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
What Are The Magnificent 7 Stocks and Why Should You Be Watching Them?
Reading Time: 5 minutesYou may have noticed two words dominating the financial news headlines in recent weeks. The words ‘Magnificent 7’ seem to be appearing on almost every media outlet you could find!
But, what exactly are the Magnificent 7 stocks and why are they so significant?
In this guide, we will take a deep dive into the Magnificent 7 stocks, what they are and why you might want to add them to your watch list in 2024.
- The Magnificent 7 stocks explained
- What makes the Magnificent 7 ‘magnificent’?
- What stocks are in the Magnificent 7?
- Why should you be watching the Magnificent 7 stocks right now?
The Magnificent 7 stocks explained
In the stock market, the Magnificent 7 refers to a group of successful companies in the US stock market. The companies in the Magnificent 7 have a significant impact on the market due to their market share and dominance.
A significant shift in the performance of one stock could have a ripple effect on the entire US stock market.
The Magnificent Seven stocks cover 4 major sectors of the market: retail trade, consumer durables, technology services, and electric technology. The places the companies at the forefront of major innovations in industries such as AI and EVs.
What makes the magnificent seven ‘magnificent‘?
There are hundreds of promising tech companies in the US stock market. So, what makes these 7 so special?
The stocks in the Magnificent 7 are considered to be the most influential companies in the world. Therefore, their performance can carry, 0r shake, the stock market.
Here are some of the reasons why the Magnificent 7 stocks are so ‘magnificent’.
They are global brands
The Magnificent 7 stocks are known everywhere. They are trusted by millions due to the high quality and reliability of their products. Their strong brand names have earned the consumers’ trust.
This means that the companies can reach customers in almost every corner of the globe including the US, Europe and Asia!
Leading innovation
Leading in innovation is what these stocks are known for. They continuously develop new technologies and solutions. From AI to electric vehicles, they are at the forefront of progress in various industries.
Being at the forefront of new technology means that these companies will continue to grow and expand long-term.
Financial health
The financial success of the Magnificent 7 stocks is also fairly outstanding. With strong revenue growth and solid finances, they are considered to be reliable investments.
Shareholders trust in their stability and profitability which makes them an attractive option.
Although, you should always do your own research before investing yourself!
What stocks are in the Magnificent 7?
We mentioned that the Magnificent 7 stocks are amongst the most successful companies in the world and you’ve probably made some good guesses as to what these are!
Let’s set things straight and take a look at the seven stocks that make up the Magnificent 7.
1. Alphabet Inc.
Alphabet Inc. is the parent of Google. It’s a top player in search and ads online. The company has changed how we find info and connect with others.
The company was created through the restructuring of Google in 2015 and is now one of the biggest tech companies in the world.
2. Apple Inc.
Apple Inc. is famous for its iPhone, iPad, and other devices. They are loved for their advanced technology and easy-to-use design. Apple is a top name in gadgets because of its dedication to quality and innovation.
If you’re reading this, you probably know at least 3 people with an iPhone which shows just how large this company has grown.
In fact, the iPhone currently has a 57% market share!
3. Amazon Inc.
Amazon is known as the biggest eCommerce platform in the world, with over 310 million users world wide.
As well as online shopping, the company is also involved with cloud computing, online advertising, digital streaming and artificial intelligence. That’s a lot of pies!
4. Meta Platforms Inc.
Meta Platforms Inc., previously Facebook, is a social media giant. It owns Facebook, Instagram, and WhatsApp. These apps changed how we connect and interact online, becoming key parts of our lives.
The company is also a key innovator in the web3 space and has launched the most popular VR headset – the Meta Quest.
5. Microsoft Corp.
Microsoft Corp makes Windows, cloud services, and software tools. It offers products for personal and business use. Microsoft helps people and companies worldwide to do more and be more productive.
The company was founded in 1975 by Bill Gates and Paul Allen. It has since grown to become a multi-billion dollar giant.
6. NVIDIA Corp.
NVIDIA Corp is a leading maker of GPUs and AI tech. Its products are used in gaming, data centres, and self-driving cars. NVIDIA has pushed the limits of tech with its innovative offerings.
NVIDIA stock is a popular choice right now because of its heavy involvement in AI and Web3.
7. Tesla Inc.
Tesla Inc. leads the EV market with its pioneering approach to sustainable transport. CEO Elon Musk guides the company’s focus on electric cars and renewable energy. Tesla is making a big impact on the auto industry.
Aside from being a pioneering company, Tesla’s CEO is a well-known (and somewhat controversial) figure with a cult following online.
Why should you be watching the Magnificent 7 stocks right now?
There is no doubt that the magnificent 7 tech stocks are big players in the stock market and they are good companies to watch all year round. However, right now is a particularly good time to keep your eye on them, here’s why.
Big tech earnings reports season
This month, several big tech companies (including members of the Magnificent 7) are due to show how they did financially in the past quarter. Each year, these reports are packed with clues about the companies’ growth and future.
Watching these helps you understand their success, profits, and compare them to their rivals.
Earnings reports can cause movement in the market. Negative reports might cause the price of a stock to dip. Whereas, positive reports could spark the value of a stock to go up.
This makes April a busy time for the Magnificent 7!
Tech stocks recently saw a dip
Another reason that now is a particularly interesting time of the Magnificent 7 is that tech stocks – including Tesla, Microsoft and Amazon – have been on a bit of a losing streak.
It’s fair to say that the Magnificent 7 didn’t start off 2024 very well.
The recent losing streak has caused a divide in the stock market. Some investors are keen to buy the dip whereas others are more cautious.
Recently, UBS Chief Investment US Equity Strategist Jonathan Golub shared his thoughts that the earnings that made these stocks ‘magnificent’ are ‘collapsing’.
What do you think?
I personally think that it’s a good idea to watch the market for a little while and wait for tech earnings to come in before making any decisions.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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