These Seven Tech Stocks Are Driving the Market (2024)

By Karl Russell and Joe Rennison Jan. 22, 2024

The S&P 500 is at a new high, and investors have just a handful of stocks to thank for it.

These Seven Tech Stocks Are Driving the Market (1)

These Seven Tech Stocks Are Driving the Market (2)

Since the index hit its latest low in October 2022, seven stocks — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla — have collectively risen nearly 117 percent, far outpacing the performance of the other 493 companies in the S&P 500. Together, these stocks have become known as the “Magnificent Seven.”

But it’s not just the stellar price performance of these stocks that helped lift the S&P 500 to a closing record on Friday. The stock index is weighted by market capitalization, meaning the moves of the largest companies contribute more to the performance of the index. In other words, the influence of these seven stocks comes down to their size. Their market value has risen more than 60 percent since October 2022.

These Seven Tech Stocks Are Driving the Market (4)

These Seven Tech Stocks Are Driving the Market (5)

The outsize impact of the Magnificent Seven can work both ways. During the later months of 2022, their relatively weak showing dragged the S&P 500 down. Over the last twelve months, their gains have accounted for more than 60 percent of the return in the S&P 500. Tesla remains lower than it was when the S&P hit its trough in October 2022, but over the last twelve months, the company has surged more than 64 percent, responsible for nearly 3 percent of the S&P 500 rally on its own.

Indeed, based on price alone, the seven big tech stocks were not the best performing in the S&P 500. Royal Caribbean, the cruise line, rose 212 percent, for example, and General Electric has risen over 160 percent since October 2022. However, these companies hold less weight in the index because they are much smaller, and each is responsible for less than 1 percent of the index’s move since then.

And some of the Magnificent Seven have done better than others. Nvidia, the chipmaker, rose a startling 417 percent, while Amazon gained just 38 percent. Microsoft has risen about 79 percent since the S&P’s low, but because it’s the largest stock in the index, its move still outweighed Meta’s 198 percent gain over the same period.

These Seven Tech Stocks Are Driving the Market (7)

These Seven Tech Stocks Are Driving the Market (8)

Understanding the dominance of Big Tech on the S&P 500 is important for understanding the signal the index is sending about the market, companies and the economy. A rising S&P 500 is usually seen as a good thing, but when an index is led higher by just a small number of companies, it can mask turbulence beneath the surface. In other words, the index can rise even when a majority of companies fall.

This has always been the case. In the 1980s, companies like IBM, Exxon and General Electric dominated, but never quite to the degree that the new breed of tech behemoths has in recent years.

Last March, a crisis among the nation’s banks sent many individual stock prices tumbling. But the S&P 500 finished the month 3 percent higher, largely because of the furor surrounding advancements in artificial intelligence and what they could mean for the tech giants’ profitability.

This dynamic has begun to subside in recent months, as more companies have joined the rally. More than half the companies in the index are higher than they were when the S&P reached its previous peak in January 2022.

Some analysts say this is a sign that the rally has more room to run as those stocks that have lagged behind begin to catch up, bolstered by greater optimism over the outlook for the economy.

Others warn that it may simply be the rise before a fall, especially as the economy continues to slow, weighing on those same companies.

FAQs

These Seven Tech Stocks Are Driving the Market? ›

The “Magnificent Seven” might sound like the title of an old Western film or what a large family might name its group chat, but in finance the moniker is being used to describe a group of high-performing tech stocks: Microsoft, Apple, Nvidia, Alphabet, Amazon, Meta and Tesla.

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What are the 7 stocks driving the market? ›

Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla lived up to their name in 2023 with big gains. But the early part of the second quarter of 2024 showed a big divergence of returns.

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What are the magnificent 7 tech stocks? ›

The ride of the Magnificent 7, the name given to a group of high-profile technology companies, may be nearing an end. Shares of the seven companies—Nvidia (NVDA), Meta (META), Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG) (GOOGL), Apple (AAPL) and Tesla (TSLA)—rose 112% on average in 2023.

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What are the super 7 stocks? ›

CNBC's Jim Cramer on Friday reviewed the “Super Seven,” mega cap European stocks Citi recently named as alternatives to the Magnificent Seven, but with lower valuations. The Super Seven are: Novo Nordisk, ASML, LVMH, Richemont, SAP, Schneider Electric and Ferrari.

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What are the 7 horsem*n stocks? ›

Instead, it's the stocks of mega-size companies – Alphabet (GOOGL), Amazon.com (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) – that have soared in price over the past year, propelling the broad market to double-digit returns.

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What are the seven stocks to buy and hold forever? ›

7 of the Best Long-Term Stocks to Buy and Hold

Stock	Sector	Trailing 12-month dividend yield*
Abbott Laboratories (ABT)	Health care	1.9%
Stanley Black & Decker Inc. (SWK)	Industrials	3.5%
Atmos Energy Corp. (ATO)	Utilities	2.7%
T. Rowe Price Group Inc. (TROW)	Financials	4.3%

3 more rows

Apr 15, 2024

Company Name	LTP	% Change
Kanani Industries	3.7	-1.33
Dynamic Cables Ltd	445	0.78
Hilton Metal Forging	116.4	-1.10
Alok Industries	27.55	0.00

What stocks do super investors buy the most? ›

Top 10 most owned

GOOG. ALPHABET INC-CL C. ...
AMZN. AMAZONCOM INC. ...
META. META PLATFORMS INC-CLASS A. ...
V. VISA INC-CLASS A SHARES. ...
BRK.B. BERKSHIRE HATHAWAY INC CL-B. ...
MA. MASTERCARD INC - A. ...
UNH. UNITEDHEALTH GROUP INC. ...
WFC. WELLS FARGO & CO.

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Is Nvidia still a buy? ›

Bottom Line. Overall, Nvidia remains the top option for investors looking to gain picks-and-shovels exposure to the AI race. The company's hardware and software products are becoming increasingly integral to any operator in this space.

Which magnificent 7 stocks pay dividends? ›

The magnificence of the Magnificent Seven stocks is limited. None of them offer attractive dividends. The best dividend payer in the group, Microsoft, still has a dividend yield of barely over half of the yield of the S&P 500.

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What are the magnificent 7 stocks of the S&P 500? ›

Big-Tech Behemoths Hold Sway Over Indices

The mega-cap leaders dubbed the “Magnificent Seven” have outperformed the stock market for several years. However, 2023 was quite impressive for the seven tech-focused US companies—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA and Tesla.

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Who is the king cobra of the stock market? ›

That person is none other than Manu Manek Mundra, also known as the Black Cobra of the stock market.

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What is the magnificent 7 share of the S&P 500? ›

It will be difficult for a sustained push higher to continue if these FAANGs do not participate, considering their outsized weighting. The Mag 7 comprises more than 40% of the Nasdaq 100 and more than 29% of the S&P 500. MSFT, GOOGL, AAPL, and TSLA account for about 18% of the S&P 500 and about 25% of the NASDAQ-100.

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What is the Big 7 in the US market? ›

Apple, Microsoft, Nvidia, Tesla, Meta, Alphabet and Amazon each outgained the broader market in 2023, but it's been a mixed bag for the group over the first eight weeks of 2024 even as indexes sit at record highs.

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What are the biggest drivers of the stock market? ›

Earnings growth has been the main driver of stock market returns since the end of the Great Financial Crisis. It's also worth noting that although dividend yields have been relatively low in recent decades, the growth in dividends paid out by corporations has been healthy.