“Magnificent 7” was originally the title of a 1960s cowboy film, but in today’s context, it’s being used to refer to a group of the 7 best-performing stocks on the US stock market that can move the indexes seemingly on their own.
Comprised of Amazon (AMZN), Apple (AAPL), Alphabet (GOOG), Meta (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA), these stocks are predominantly tech companies with global brand recognition, consistent strong earnings, and dominant positions in their respective industries.
Here’s how the Magnificent 7 compared against the S&P 500, which grew by 24.72% in 2023.
Alphabet (NASDAQ: GOOG)
Alphabet, best known for its search engine service Google, offers more than 50 internet services and products, such as Gmail, YouTube, and Google Maps, which are integral services for day-to-day life for many people worldwide.
Alphabet’s main revenue source comes from its Google Ads, where it takes the largest market share of 39% of worldwide digital advertising revenue. In 2023, Alphabet’s revenue grew by 6.2% to $300,380 million. Comparatively, in the last three years, it grew by12.77% in 2020, 41.15% in 2021, and 9.78% in 2022.
Alphabet’s stock price grew by 56.74% in 2023.
Amazon (NASDAQ: AMZN)
Amazon started off as an e-commerce platform but has since diversified into cloud computing, online advertising, digital streaming, and Artificial Intelligence (AI). Nevertheless, its e-commerce business reported strong numbers in 2023, accounting for an estimated 48% of retail spending in the US. It is also a dominant player in Cloud Services, taking an estimated 32% of the global cloud services market share.
In 2023, Amazon experienced 11.00% revenue growth, reaching $570,521 million. This follows a pattern of consistent growth over the past three years, with rates of 37.62% in 2020, 21.70% in 2021, and 9.40% in 2022.
Unsurprisingly, Amazon’s stock price grew by 77.04% for the same period in 2023.
Apple (NASDAQ: AAPL)
Well-known for its products like the iPhone, Macbook, iPad, and Apple Watch, Apple designs smartphone, wearable, and personal computing products and sells a variety of related services. Apple has a dominant position in the smartphone market, claiming a 17.7% market share in 2023, just behind its main rival, Samsung, which took 19.7% of the market share.
Other than the iPhone, Apple has a strong ecosystem of service integration between its products, incentivising users to purchase its other products. Alongside this, its products typically sport a sleek and fashionable design, earning Apple its loyal user base.
In 2023, Apple’s revenue shrank by -2.80% to $383,285 million. This comes in contrast with its consistent revenue growth in previous years, where its revenue grew by 5.51% in 2020, 33.26% in 2021, and 7.79% in 2022. Despite its negative revenue growth, Apple’s stock continued to perform well, achieving 53.94% growth in 2023.
Meta Platforms Inc. (NASDAQ: META)
Meta, formerly known as Facebook, started off as a social media platform, Over the years, it has acquired well-known brands like Instagram, Whatsapp and Oculus VR to become the dominant social media platform worldwide. Meta taps upon its strong user base for advertising revenue, where businesses can target ads at users of specific demographies. In 2023, Meta announced that it was making AI models like Llama 2. The main strategic thrust is to use AI to improve its existing products and services.
After a weak performance in 2022, Meta’s revenue grew by 14.61% to $133,645 million in 2023. In the previous three years, its revenue grew, by 21.60% in 2020, 37.18% in 2021, and 1.12% in 2022.
In 2023, Meta’s stock price grew by 183.76%, making it the second-strongest performer among the Magnificent 7.
Microsoft (NASDAQ: MSFT)
Microsoft is known for products such as Windows OS and Office 365, which are widely used for both personal and commercial purposes. It also has other products like Microsoft Teams and Surface Laptops.
ChatGPT forms a core part of Microsoft’s plans to integrate AI into its services, and in 2023, Microsoft increased its investment in OpenAI (creator of ChatGPT), by a further $10 billion to $13 billion.
Microsoft’s revenue saw a smaller increase in 2023 to $211,915 million or a 6.88% growth from the previous year. Comparatively, in the previous there years, Microsoft’s revenue grew consistently by 13.65% in 2020, 17.53% in 2021, and 17.96% in 2022.
Despite the smaller revenue growth in 2023, Microsoft’s stock price grew by 56.96 % in 2023.
Nvidia (NASDAQ: NVDA)
Nvidia’s main business is designing graphics processing units (GPUs) for high-performance computing applications, but of late, it has also become the main supplier of chips that are used for AI applications. In 2023, Nvidia had a 92% market share for GPUs intended for use with AI.
Nvidia’s revenue increased by a whopping 118.91% to $59,048 million in 2023. In the previous three years, Nvidia’s revenue grew by 52.73% in 2020, 61.40% in 2021, and 0.22% in 2022.
Reflecting the financial numbers, Nvidia’s stock price surged by a whopping 245.94% in 2023, outpacing the S&P 500’s growth by more than tenfold. This exceptional performance made it the strongest performer of the Magnificent 7 stocks.
Tesla (NASDAQ: TSLA)
Tesla, Inc. is probably best known for being a manufacturer of Electric Vehicles (EVs). In 2023, Tesla captured 56.5% of the EV market share, making it a dominant player in the EV market. While Tesla only has a 1-3% share of the wider automotive market, the EV market has been growing year-on-year as consumers make the switch to EVs, which presents Tesla with long term growth opportunities if it can maintain its market share.
In 2023, Tesla’s revenue grew to $97,134 million or 19.24%. Comparatively, its revenue growth for the past 3 years was, and 28.31% in 2020, 70.67% in 2021, and 51.35% in 2022.
Despite the volatile price movements, Tesla’s stock price grew by 129.86% in 2023.
Revenue Growth Vs Stock Price Growth:
Stock
Revenue Growth (%)
Stock Price Growth (%)
Alphabet
6.20%
56.74%
Amazon
11.00%
77.04%
Apple
-2.80%
53.94%
Meta
14.61%
183.76%
Microsoft
6.88%
56.96%
Nvidia
118.91%
245.94%
Tesla
19.24%
129.86%
Nvidia’s revenue growth was the highest, and correspondingly, the stock price growth was also the highest. Similarly, for Apple, its revenue shrank and it was also the weakest performer in 2023. Meta and Tesla were the second and third highest in revenue growth, and were also second and third highest in stock price growth correspondingly. We can see that there is some relationship between revenue growth and stock price growth of each company.
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