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The Magnificent Seven's stocks have skyrocketed to the size of the stock markets of three countries combined.
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The group was valued yesterday at $11.7 trillion, roughly equal to the stock market of the United Kingdom, Japan and Canada.
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Concern is growing that a handful of highly valued stocks are driving the S&P 500's unsustainable performance.
Our Chart of the day comes from Apollo Global Management, which shows that the market value of the "Magnificent Seven" stocks has skyrocketed to the size of the stock markets of three developed countries combined.
He seven magnificent (Amazon, Apple, Alphabet, Meta, Nvidia, Tesla and Microsoft) had a total market value of $11.7 trillion as of Tuesday's close. That's worth about the same as the entire stock markets of the United Kingdom, Canada and Japan combined, according to Bloomberg data compiled by Apollo chief economist Torsten Slรธk.
The group of technology titans achieved monstrous returns in 2023, with an increase of 107%.
In fact, the seven actions represented most of the gains in the S&P 500 last year, and the rest of the index is trading relatively flat. This has raised concerns among speculative AI bubble is forming in the market, causing mega-cap stocks like Microsoft, Amazon and Nvidia to become overvalued as investors chase the hype.
The Magnificent Seven's stock valuations are "extreme," according to Richard Bernstein Advisors. That could lead the market to swing in the other direction, producing a once in a generation investment opportunity in virtually every area outside the Magnificent Seven, the investment adviser said in a research note late last year.
"The significant superior performance of the Magnificent Seven could be justified if they were truly unique. Unfortunately, that is not the case," the company states. saying. "Rather, it increasingly appears that investor enthusiasm for these seven stocks is a reflection of the current speculative and momentum-driven market. But investor shortsightedness has resulted in huge opportunities elsewhere."
The Magnificent Seven have taken a hit entering the new year, with their collective market capitalization falling by $250 billion on the first trading day of 2024. Apple experienced the steepest dropfalling 4% to lose $100 billion in market value.
Read the original article at Business Insider
