Introduction to the Seven Magnificent Companies
The stocks of six out of the Seven Magnificent companies surged on Wall Street before their Q3 earnings reports, according to recent news. These companies are NVIDIA, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla, collectively valued at over 22.01 trillion dollars, representing nearly one-third of the S&P 500’s market capitalization.
Performance of Individual Companies
- NVIDIA: The leading AI chip developer saw a 4.99% increase to $201.04, reaching an all-time high.
- Microsoft: The software developer’s stock rose 1.97% to $542.01, also hitting a record high.
- Tesla: The electric car manufacturer’s shares reached $460.55, a 1.80% increase.
- Amazon: The e-commerce platform’s stock gained 1% to $229.25.
- Apple: The iPhone manufacturer’s stock rose 0.08% to $751.44.
- Meta Platforms (formerly Facebook): The stock increased 0.07% to $269.
Alphabet, Google’s parent company, was the only one in the group to experience a decline, falling 0.66% to $267.48.
Market Impact and Analyst Insights
The collective market value of the Seven Magnificent companies reached $345,833,82 million.
Felipe Mendoza, an analyst at ATFX LATAM, stated that the S&P 500 hit new historical highs, driven by continued enthusiasm surrounding the Seven Magnificent companies. Their valuations and projected profits continue to lead the global bullish sentiment.
Mendoza added that this week looks positive, backed by the anticipation of upcoming Q3 earnings reports: Microsoft, Alphabet, and Meta will report on Wednesday, while Apple and Amazon will do so on Thursday.
He emphasized that these reports are crucial to confirm if the valuation rally is supported by real revenue growth and margin expansion.
Actinver analysts noted that the US market displayed optimism following NVIDIA’s developer event, reinforcing the strength of the AI ecosystem. During NVIDIA’s presentation with the highest S&P 500 market capitalization, partnerships were announced with companies from various sectors to strengthen its position as a key player in this technological transformation.
Market Capitalization Rankings
Microsoft’s stock price increase positioned its market capitalization at $4.029 trillion, making it the second-most valuable company globally, just behind NVIDIA at $4.885 trillion.
Apple closely follows with a market cap of $3.992 trillion, momentarily surpassing the $4 trillion mark.
Alphabet (Google) is valued at $3.240 trillion, Amazon at $2.445 trillion, Meta at $1.888 trillion, and Tesla at $1.532 trillion.
Mendoza concluded that the US market is experiencing a rational euphoria phase, where corporate results will determine if the rally can be sustained or if a technical profit-taking phase is approaching. Meanwhile, the performance concentration in large technology firms solidifies a new paradigm around AI as a transformative growth driver capable of redefining productivity and valuations by the end of 2025.
Key Questions and Answers
- What are the Seven Magnificent companies? NVIDIA, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla.
- Why are these companies important? Together, they represent a significant portion of the S&P 500’s market capitalization and are crucial drivers of Wall Street’s recent rally.
- What are the Q3 earnings reports? Quarterly financial reports from these companies, which are expected to confirm if the current market rally is based on real growth and profit expansion.
- What role does AI play in this scenario? AI is a key growth driver, with companies like NVIDIA leading the charge and reinforcing their positions in the technological transformation.
