Apple, Tesla, Nvidia, and the Rest of the Magnificent Seven Are Larger Than Entire Countries’ Stock Market
The Magnificent Seven stocks’ meteoric rise has led to concerns about their lofty valuation and overconcentration in the stock market today.
To further put it in perspective, the seven stocks alone are four times the market cap of the entire Russell 2000, notes Torsten Slok, chief economist at
The group is also larger than any single country’s stock market except for the U.S., data shows.
All stocks trading on China’s Shanghai and Shenzhen exchanges are worth a little over $8 trillion, just two-thirds the size of the Magnificent Seven.
The seven stocks are the same size as the entire stock markets in the U.K., Canada, and Japan combined. Apple or Microsoft alone is as large as the entire stock market in Canada.
The Magnificent Seven stocks are some of the biggest winners last year thanks to the newly found investor enthusiasm about generative AI.
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Despite some initial dip in the new year, a few in the group are already in the black again. Nvidia has gained 5.4% year to date, Meta Platforms rose 1.4% and Alphabet edged up 0.1%. The rest of the group are lower for the year.
The S&P 500 increased by an impressive 24% last year, but much of the gains were driven by the seven names. The uneven rally has made many believe that 2024 would be the year for Magnificent Seven to take a back seat and smaller stocks to take the lead.
Nearly half of the index’s members are still below where they were in January 2022 when the market hit record high, wrote
strategist Kevin Gordon in a note last week.
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While the Magnificent Seven dominated the headlines last year, they are only magnificent in terms of size, not so much their performance, wrote Gordon. Dozens of names have outperformed the group last year, he wrote: “There’s no reason to believe that can’t be repeated again this year.”
Still, some argue it’s too early to write off the tech giants. “While the Magnificent Seven may not replicate the meteoric highs of 2023, they are poised to remain formidable players for investors around the world,” wrote deVere Group CEO Nigel Green in a note last week.
Green cited the group’s maturing market positions, commitment to innovation, resilience in economic downturns, and alignment with global megatrends as reasons for their sustained success for years to come. “Only the foolish would dismiss the Magnificent Seven despite the rocky start to the year,” he wrote.
Write to Evie Liu at evie.liu@barrons.com
