Written by: George Prior
The Magnificent Seven tech stocks have had a notable downturn in fortunes so far in 2024, but “only the foolish” would write them off for the rest of the year, predicts the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.
The bullish prediction from deVere Group’s Nigel Green comes as the so-called Magnificent Seven, which includes Apple, Amazon, Alphabet (Google), Microsoft, Meta, Tesla and Nvidia, dropped in the last four trading days, which is the longest losing streak in a month.
He says: “The recent slip in these tech stocks is prompting investors and analysts to question the sustainability of their impressive 2023 rally.
“But while uncertainties remain, and there are compelling reasons to believe that these stocks may not surpass the highs of last year, we expect them to continue to perform well, captivating global investors’ attention in 2024.”
There are five main reasons why the deVere CEO believes these tech behemoths will continue to shine this year.
First, post-rally realism. “The remarkable rally of the Magnificent Seven in 2023 outpaced market expectations, setting record highs and contributing significantly to overall market gains.
“The recent pullback is a course correction, bringing valuations more in line with fundamentals.
“As investors recalibrate their expectations, this shift represents a return to a more sustainable growth trajectory, avoiding the pitfalls of irrational exuberance,” he affirms.
Second maturing market positions. “Many of the Magnificent Seven have already achieved dominance in their respective markets.
“For example, Apple and Microsoft are established giants in hardware and software, while Amazon rules e-commerce, and Alphabet dominates online advertising.
“The maturation of their market positions suggests that achieving astronomical growth rates becomes more challenging.
“However, their established market share and resilient business models position them for steady performance and sustained investor interest around the world.”
Third, innovation and evolution. Nigel Green comments: “The tech titans aren’t resting on their laurels.
“They continue to invest heavily in innovation, exploring new avenues for growth and diversification.
“Whether it’s Meta delving into the metaverse, Tesla’s advances in electric vehicles and renewable energy, or Nvidia’s innovations in AI and gaming, these companies are at the forefront of tech evolution.
“Their commitment to staying ahead of the curve ensures a continued appeal to investors seeking exposure to cutting-edge technologies.”
Fourth, resilience in economic downturns. “These firms have proven their ability to weather challenging economic conditions, with their diversified revenue streams, strong balance sheets, and global reach,” notes the deVere Group CEO.
And fifth, global megatrends and digitalization. He says: “The global shift towards digitalization and the acceleration of tech megatrends remain potent drivers for the Magnificent Seven.
“The increasing reliance on digital solutions, cloud computing, e-commerce, and advancements in AI positions these companies at the forefront of transformative shifts in various industries.”
While the Magnificent Seven may not replicate the meteoric highs of 2023, they are poised to remain formidable players for investors around the world.
“Their maturing market positions, commitment to innovation, resilience in economic downturns, and alignment with global megatrends, position them for sustained success in 2024 and for years to come. Only the foolish would dismiss the Magnificent Seven despite the rocky start to the year,” concludes Nigel Green.
Related: Markets Are Jittery at Start of 2024 – What Investors Need To Do