Forget the Magnificent Seven or FAANG. A new portfolio of technology stocks is being prepared for the moon, says one analyst.
The new group of rising stars includes only three artificial intelligence leaders: Microsoft, Nvidia, and now Meta.
The meteoric rise in the stock prices of America’s largest technology companies over the past decade has been the driving force behind the rise in the stock market, and thus in 401(k)s.
Initially dominated by Facebook, Apple, Amazon, Netflix, and Google, it was dubbed the FAANG by CNBC’s Jim Cramer.
Last year saw the emergence of the Magnificent Seven, adding Tesla, Microsoft, and Nvidia and excluding Netflix.
Raymond James analyst Josh Beck (pictured) says Microsoft, Nvidia and Meta are the stocks to watch.He named it “MnM” at the time – not to be confused with rapper Eminem or M&M’s.
Together, these seven companies rose 75% in 2023, but Tesla and Apple in particular have slumped since then. Tesla has fallen 27 cents this year.
“Hmm? Microsoft, Nvidia, and *now* Meta leading the way in the AI era,” Raymond James analyst Josh Beck said in a note to clients.
This year, Microsoft rose 10% to $405, overtaking Apple to become the world’s largest company. Nvidia rose 44% to $693, while Meta (formerly Facebook) rose 33% to $459.
Tesla is down 27% since January 1st, while Apple is flat. Amazon and Netflix are both on the rise, but they are not thought to be powered by AI like MnM.
DailyMail.com asked another analyst about MnM and whether it’s too late to invest.
Brett Kenwell of eToro said: “This was a great achievement for the so-called ‘MnM’ trio of Microsoft, Nvidia and Meta.
“Meta and Nvidia are up about 30 percent and 40 percent year-to-date, and about 145 percent and 220 percent, respectively, over the past year.
“Microsoft is no slouch either, up almost 60% in the past 12 months.
“Can we continue?” Some consolidation would certainly make sense, given the recent stock price gains not just for these particular stocks, but for the Nasdaq and S&P 500 as a whole.
“Nonetheless, long-term tailwinds remain strong for the MnM trio.”
That means there’s still good news for these three stocks given the rapid shift toward AI.
Before Mr. Beck came up with “MnM” on Friday, there was another, less creative alternative to “The Magnificent Seven.”
eToro’s Bret Kenwell shares his thoughts on MnM – Microsoft, Nvidia, and Meta
For example, the Super 6 excludes Tesla, while the Fabulous 5 also excludes Apple.
Beck focused on Meta in Friday’s note, which saw the stock rise 22% that day, giving it a market cap of more than $200 billion.
This is the largest single increase in value for a U.S.-listed company, according to Dow Jones Market Data.
DailyMail.com also asked eToro’s Kentwell separately for his thoughts on the three.
Read his thoughts below….
Meta
“Despite Meta’s meteoric rise to new highs, the company started paying a dividend and added a whopping $50 billion to its stock repurchase plan on top of strong quarterly reports.”
“However, the company trades at only 23 times forward earnings and is expected to grow almost 32% this year.”
Meta’s stock price also rose last week after the company announced its first-ever quarterly dividend of 50 cents a share and an additional $50 billion in stock buybacks.
Stock buybacks and dividends help boost stock prices by giving investors cash just for owning a company’s stock. Mehta’s first cash dividend of 50 cents per share was paid on March 26 and will be paid on a quarterly basis going forward.
Nvida
“It’s easy to criticize Nvidia simply based on the huge increase in stock price (and the idea that AI is just a fad),” Kentwell said.
“But that’s not the case with AI, a movement that Nvidia is spearheading. They’re the clear leaders in the AI revolution, and they’re a quality company at that.
“With a market capitalization of $1.7 trillion, Nvidia is no longer in the spotlight. But the stock’s rise hasn’t happened out of nowhere. Earnings and sales are the same as profit margins and free cash flow. This rise is not just due to feverish speculation, but also in anticipation of strong demand powered by AI.
“NVIDIA’s valuation is a little higher, mainly because it’s up nearly 50% in the past three months.
But it would be short-sighted to forget that NVIDIA spent the second half of 2023 with its stock price down by less than $500. The recent breakout is strong, but not all that surprising. ”
microsoft
“Microsoft’s performance has been a little subdued this year, with growth of about 8%, but the fiscal year ends in June,” Kentwell said.
Consensus forecasts have since accelerated, with expectations for double-digit earnings and revenue growth in fiscal 2024 and fiscal 2025, respectively.
“The company’s strong balance sheet, strong cash flow, and high profit margins position it as a blue-chip in the mega-cap tech industry.
“In addition to expected accelerating earnings and sales, our exposure to AI through OpenAI and various business units makes Microsoft attractive to investors looking for ways to more securely leverage AI. Of course.”
Nvidia, which makes computer chips, has returned nearly 250 percent this year, making it a top performer on the S&P 500.
Can NVIDIA overtake AMAZON?
Wall Street’s enthusiasm for artificial intelligence is pushing Nvidia’s value to surpass Amazon’s for the first time in 20 years, leaving the AI chip maker far behind Google owner Alphabet.
Nvidia’s stock price has risen 40% since the start of 2024, increasing its market capitalization to $1.715 trillion as of midday trading Wednesday, about 3% more than Amazon’s $1.767 trillion, according to It’s only 6% lower than Alphabet’s $1.812 trillion. LSEG data.
Nvidia announced its quarterly results on February 21st.
Morgan Stanley raised its price target to $750 from $603, and analyst Joseph Moore wrote in a note to clients that “demand for AI continues to surge.”
Nvidia’s stock price has more than tripled in 2023, making it already the fifth most valuable company on the U.S. stock market.