In 2024, the S&P 500 had another great year, rising more than 20% for the second year in a row. However, there are a handful of companies that deserve much of the praise for this outstanding performance. The 2024 performance of the much-talked-about Magnificent Seven stocks accounted for more than half of the index’s roughly 23% return. The market capitalization of these seven companies accounts for more than one-third of the S&P 500’s market capitalization.
So, who are the stocks of the “Magnificent Seven” group?
The elite group of Magnificent Seven includes Apple, Microsoft, Alphabet (Google’s parent company), Amazon, Nvidia, Meta Platforms, and Tesla. Growing interest around artificial intelligence (AI) played a key role in driving the stock process for these tech giants. They are listed on both the Nasdaq 100 and S&P 500 indexes.
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These companies outperformed their peers in 2024, continuing the dominance of big tech stocks that began in the first half of 2023, just after the U.S. local banking crisis erupted.
Shares of large tech giants like Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), and Tesla (TSLA) generally rose. 2023 will see an even more impressive 75% jump, reaching 63% in 2024.
Looking forward, the performance of the U.S. stock market, particularly as reflected in the Nasdaq 100 Index, will continue to be closely tied to the fate of these seven companies.
In 2024, the group’s profits accounted for more than 75% of the S&P 500’s profit growth. The Magnificent Seven is expected to continue its performance in 2025, but analysts predict that growth may be slower than the impressive growth of the past two years. There is.
However, investing large sums of money in technology stocks comes with risks. Overexposure to a single sector can also increase portfolio vulnerability. While AI remains a strong and promising topic, portfolios that are overly concentrated in technology companies may face higher levels of risk. Diversification remains important for global investors to manage potential market volatility.
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