After several years of leading the S&P 500 (IVV), Nasdaq (QQQ), and Dow Jones (DJI) near their current highs of today, leadership among the Magnificent 7 stocks is waning.
The seven tech stocks on this list are Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN), Meta Platforms (META), Tesla (TSLA), Nvidia (NVDA), and Apple (AAPL). Yet at their size, as measured by market capitalization, and at this phase of the AI boom, investors need to look elsewhere.
AMD (AMD) and Nvidia design their chips, relying on Taiwan Semiconductor (TSM) to manufacture them. By contrast, Intel (INTC) is on the verge of opening manufacturing plants in the U.S. Investors bought INTC stock ahead of that major transition. Mag 7 buyers might consider buying TSM stock.
Broadcom (AVGO) is worth considering. Broadcom is a fabless chip company that does not operate its own foundries. Recently, it announced a collaboratively designed chip with OpenAI, named Jalepeno.
The allure of buying Tesla is at risk of losing momentum. The firm faces an erosion in EV sales. It needs to rely on markets, hoping for Cyber cabs to compete against Google’s Waymo.
Meta Platforms is not attractive to hold at this time. While it dominates the ad market, revenue growth might slow as a weaker economy hurts sales.
Apple risks more selling pressure. The firm blamed Micron’s (MU) five-fold increase in memory chip prices. But tariffs also added to costs. Expect both sources of cost pressures to continue.
Among the Mag 7, Alphabet is the most diversified. It might rebound first.
