3 February – 14:03
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They are worth 12.3 trillion, more than the GDP of Germany, Japan, and India combined. They have driven the S&P500 up by 65% while the other 493 companies have grown by just 20%.
Now analysts have doubts about their sustainability. The Magnificent Seven are back in action, pulling the entire Wall Street Stock Exchange.
They are the leaders of the S&P500 stock index (in alphabetical order): Alphabet, the parent company of Google, Amazon.com, Apple, Meta, the parent company of Facebook, Microsoft, Nvidia, and Tesla. Thanks to them, the S&P500 has reached new highs in recent days.
Since the lows of October 12, 2022, the Magnificent Seven have appreciated by 65%, almost double the 35% performance of the entire index and much more than the 25% of the remaining 493 companies comprising the same index. Thanks to their size – ranging from Apple and Microsoft’s $2.9 trillion to Tesla’s “mere” $700 billion – the Magnificent Seven account for almost a third (28%) of the entire S&P500 index.
If it were only calculated on the arithmetic average of stock prices – as is the Dow Jones – it would show a less brilliant performance. If only a few stocks are driving up the S&P500 index, while the majority are declining, it can be a cause for concern.
But in recent months, an increasing number of listed companies have joined the rally: over half of the 500 now have prices higher than those reached in the previous Wall Street peak in January 2022. In 2023 alone, the seven leading stocks have added 5 trillion (5 trillion) dollars to their market value, doubling it.