The Magnificent Seven

For a change from the usual routine this morning, I'm going to give an update on the seven mega cap Tech stocks that were dubbed "The Magnificent Seven" in 2023. Just as the "Nifty 50" imploded in the early 1970s, it's highly unlikely this market will survive the hubris of relying upon seven "Magnificent" stocks.

Top Performers: Nvidia, Meta

One pundit recently suggested that the Mag7 should be winnowed down to the Mag2 because only Nvidia and Meta (Facebook) are now powering the indices higher. In 2024, both Meta and then Nvidia set new records for the most market cap gained in one day - following their respective earnings reports. I've shown Nvidia many times this past week, so below I show a chart of Meta which gapped up after earnings and has so far held the gap. An interesting story yesterday that Meta is now back in hiring mode following a year of mass layoffs. As we recall it was perceived over-hiring for "Virtual Reality" that imploded the stock in 2022.

"Any resurgence in hiring could bring back doubts over whether CEO Mark Zuckerberg can curb his instincts to hire his way to technological dominance"

Both Google and Microsoft were deemed to have "beat" on earnings, but both stocks have been punished post-earnings.

Microsoft has been rolling over this entire month of February:

Google is in freefall:

The new all time high was clearly a bull trap.

I showed Amazon last week as it's now being added to the Dow. Ironically, that stock is still considered one of the solid performers and yet it is one of the few stocks that still has not exceeded its 2021 high (not shown).

Here we see Apple which made a new high and is rolling over hard.

It's clear that the 5G upgrade cycle was a bust, as smartphone sales peaked way back in 2016.

Which leaves Tesla which peaked at a $1.2 trillion market cap and now is worth ~$600 billion. 1/3rd the value of Nvidia.

In summary:

Tesla is a warning as to what happens to all stocks that are considered "Magnificent".