Jim Cramer, a familiar face on CNBC, introduced the term FANG in 2013, referring to the major tech stocks Facebook, Amazon, Netflix, and Google. He later expanded it to FAANG by adding Apple in 2017.
While these stocks have maintained strong performance, new tech giants have emerged in the 2020s. In 2023, Bank of America analyst Michael Hartnett coined the term “Magnificent Seven,” inspired by the classic Western film.
These companies are not just highly valuable; they are at the forefront of significant tech trends, including artificial intelligence, cloud computing, online gaming, and advanced hardware and software.
Overview of the Magnificent 7 Stocks
Microsoft Corp. (MSFT)
As the largest software company globally, Microsoft is renowned for its Windows OS, Azure cloud services, LinkedIn, Office suite, and Xbox. It leads in professional software and AI innovation, investing $13 billion in OpenAI, the creator of ChatGPT.
Microsoft has integrated AI into its Bing search engine and offers a unified experience through Microsoft Copilot. Over the past decade, it has delivered a remarkable 1,018% total return, with an average analyst price target of $508.96, indicating an 11.9% upside from its recent closing price of $454.86.
Amazon.com Inc. (AMZN)
Founded in 1994 as an online bookstore, Amazon has evolved into a top online retailer, cloud services provider, and entertainment platform. Key strategic moves include acquiring Whole Foods and launching Amazon Prime. Over the past decade, shares have risen 850%, with an average analyst price target of $237.86, suggesting a 17.1% upside from its recent closing price of $203.10.
Meta Platforms Inc. (META)
Meta operates major social media platforms like Facebook, WhatsApp, Messenger, and Instagram, boasting around 3.43 billion daily active users. Initially focusing on the metaverse, the company has returned to its social media roots after facing market backlash. Over the past ten years, Meta shares have increased by 694%, with an average analyst price target of $711.78, indicating an 11.8% upside from its recent closing price of $636.57.
Apple Inc. (AAPL)
A leader in consumer electronics, Apple primarily generates revenue from iPhone sales, alongside Macs, iPads, and wearables. While iPhone growth has slowed, its high-margin services segment has thrived. Over the past decade, Apple shares have yielded a 578% total return, with an average analyst price target of $228.76, suggesting a 13.6% upside from its recent closing price of $201.36.
Alphabet Inc. (GOOG, GOOGL)
As the parent company of Google and YouTube, Alphabet dominates the global search market with a nearly 90% share. Its diverse portfolio includes cloud services and AI technology. Over the past decade, Alphabet has achieved a 519% return, with an average analyst price target of $200.56, indicating a 17.4% upside from its recent closing price of $170.87.
Nvidia Corp. (NVDA)
Nvidia is a leader in high-end graphics and mobile processors. Its staggering 26,466% gain over the past decade far exceeds that of its peers. The demand for online gaming and cloud data centers, along with its dominance in AI chips, drives its growth. The average analyst price target for Nvidia is $162.77, suggesting a 22.5% upside from its recent closing price of $132.83.
Tesla Inc. (TSLA)
Tesla is a frontrunner in electric vehicles and renewable energy. With a strong following for CEO Elon Musk, the company is viewed as a disruptor in the auto industry. Despite concerns about high valuations, Tesla shares have surged 1,964% over the past decade. The average analyst price target is $295.81, indicating a 13.3% downside from its recent closing price of $341.04.
The Takeaway
While past performance doesn’t guarantee future results, the Magnificent Seven have significantly outperformed the S&P 500 over the last decade. Their focus on high-growth technologies positions them well for continued success, even with a combined market cap exceeding $16 trillion. These stocks may still have room to grow in the evolving market landscape.
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