Cracks in Magnificent Seven as Apple, Tesla stock value declines

The CEO of UK-based global advisory firm, deVere Group, has revealed a fracture affecting the Magnificent Seven tech stocks after Tesla and Apple saw a 28 per cent and 12 per cent drop in their stock value in 2024.

This comes after concerns came to light regarding a “speculative bubble’ forming around the Magnificent Seven stocks. Nigel Green said these “setbacks” should be considered by investors within the wider context of their recent market dominance, strong performance and long-term trajectory.

“In 2023, the Magnificent Seven collectively achieved a staggering net income growth of 27%, a stark contrast to the net income loss of 4% experienced by the rest of the S&P 500,” he said.​

“This impressive feat underscores their ability to thrive and expand their market dominance. Such consistent and robust financial performance is testament to their enduring relevance and innovative capacity.

“Tesla’s pioneering electric vehicles and renewable energy, coupled with Apple’s innovative product line-up and strong brand loyalty, position them strongly. The temporary fluctuations in their stock value should not overshadow their intrinsic value and potential for future growth.

“The Magnificent Seven tech stocks in the S&P 500 are more than just investments; they’re gateways to the future. With their stellar financial performance, early investments in AI, and unwavering commitment to innovation, these stocks are likely to be set for a continued bullish run.”

Green said these stocks have tapped into the early stages of investment in artificial intelligence (AI) development, helping to “bear fruit” and “cement their positions as leaders in tech”.

“Meta, for instance, has seen its stock surge by a remarkable 44% this year, propelled by its AI-driven initiatives and innovative strategies,” he said.​

“Microsoft, on the other hand, has not only surpassed Apple as the most valuable company in the world but has also witnessed an 8% increase in its stock value, proving the enduring relevance of its AI-driven ecosystem.

“The pivotal role played by chipmaker Nvidia in powering the AI revolution cannot be overstated. With its cutting-edge tech and innovative solutions, Nvidia is now driving technological advancements across various sectors.

“This year alone, the stock of Nvidia has soared by an astounding 87%, a reflection of its unparalleled growth trajectory and unwavering investor confidence.”