‘Magnificent Seven’ Tech Companies Driving Forward With AI

Recent dominance of the ‘Magnificent Seven’ tech stocks – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla – is propelled by advancements in AI

The recent dominance of Meta, Microsoft and Nvidia, along with Apple, Alphabet, Amazon, and Tesla – the so-called Magnificent Seven tech stocks – is indicative of “a fundamental shift”, primarily propelled by advancements in AI.

At the time of writing in February 2024, the top seven tech stocks have not only accounted for about half of the gains in the entire S&P 500, but also contributed to over a quarter of the index's total market capitalisation. 

Nvidia, in particular, experienced huge AI and generative AI breakthroughs in 2023, with CEO and Founder Jensen Huang announcing it expected to become the world’s first trillion-dollar semiconductor stock. Nvidia has been the best-performing tech stock over the last year. In its Q3 2023 report for the 2024 financial year Nvidia announced that its total revenue was up 206% year-on-year to US$18.12bn, particularly driven by strong data centre growth.

“Nvidia, in particular, has been making headlines with an astonishing 50% surge in its stock value within the first two months of the year,” comments Nigel Green, the CEO of one of the world’s largest independent financial advisory and asset management organisations, deVere.

“However, labelling this surge as a bubble requires a nuanced understanding of the underlying factors driving these unprecedented gains. 

“Rather than a speculative mania, the market’s response to the Magnificent Seven seems to be grounded in the transformative power of AI, which is reshaping entire industries, enhancing productivity, and paving the way for the creation of new ones.

“At the heart of this paradigm shift is the increasing integration of AI technologies across various sectors.”

Recent growth in AI is driving success for big tech companies

With a Microsoft-sponsored study by IDC projecting that generative AI will add nearly US$10tn to global GDP over the next 10 years, Microsoft has embraced the Gen AI revolution: building it into its consumer and enterprise offerings. This, in addition to its continued investments in cloud computing, has helped it overtake Apple as the most valuable country in the US in early 2024.

“Meta’s focus on the metaverse, Microsoft’s investments in cloud computing and AI-driven solutions, and Nvidia’s prowess in graphics processing units (GPUs) for AI applications underscore the importance of these companies in shaping the tech landscape,” Green notes. “Their combined market capitalisation reflects investor confidence in the long-term potential of AI to drive innovation, efficiency and profitability.”

One key factor contributing to the sustained growth of the Magnificent Seven is the ongoing expansion of AI applications. 

“These companies are not merely riding the wave of current technologies but actively shaping the future of AI.

Meta, for instance, is investing heavily in AI research to create more immersive and interactive experiences within the metaverse. The company recently said it would be building out massive compute infrastructure to help support its Gen AI ambitions.

“Microsoft’s Azure cloud platform leverages AI to offer scalable and intelligent solutions for businesses, demonstrating a commitment to AI-driven transformation,” Green continues

“Nvidia's remarkable stock performance can be attributed to the increasing demand for GPUs in AI and machine learning applications. 

As industries across the board integrate AI into their operations, the need for powerful hardware accelerators becomes paramount. Nvidia’s strategic positioning in this space positions it as a key player driving the AI revolution. The surge in its stock value reflects not only current market trends but also anticipation of sustained demand for its products as AI adoption continues to grow.”


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