The past year was a rollercoaster ride for tech stocks, with huge highs and lows that gave investors whiplash. But a select group of companies, dubbed the “Magnificent Seven”, proved their mettle and emerged as stars of 2023. This elite cohort – comprising Apple, Microsoft, Amazon, Alphabet (Google), Meta, Tesla and Nvidia – outpaced the broader market.
However, the new year got off to a rocky start for some of these high-flyers. In the first week of 2024 trading, several Magnificent Seven stocks stumbled, sparking worries that the glory days might be over. But seasoned investors know better than to make judgments based on a few days of trading. One week does not negate the positive long-term trends and catalysts propelling these tech titans to new heights.
While the Magnificent Seven will likely continue to dominate in 2024, performance within the group could diverge more than last year. Fierce competition, especially in artificial intelligence, will strain the ranks as companies vie for supremacy in hot emerging sectors. We may see changing of the guard at the very top.
Here are three Magnificent Seven stocks that look poised to shine the brightest in 2024:
Apple – The Sleeping Giant Stirs
After lagging behind in the AI race last year, Apple is now ready to reclaim its title as the world’s most valuable public company. The tech behemoth has remained tight-lipped about its AI plans, but many expect Apple to leapfrog rivals with groundbreaking announcements this year.
The launch of Apple’s spatial computer, Vision Pro, on February 2, 2024 could be a major catalyst. Though Microsoft currently holds the mantle as the largest company by market cap thanks to its impressive generative AI, Apple is ripe to retake the lead. While other tech companies rushed headlong into AI, Apple patiently waited, likely developing something game-changing under the hood.
Beyond AI, Apple has many arrows in its quiver that could drive shares higher in 2024. The legendary brand remains dominant in smartphones and tablets. New iterations of those devices, along with advancements in Apple Watch, AirPods and Macs will keep Apple at the forefront of consumer tech. Meanwhile, the company’s services segment – App Store, Apple Music, iCloud, Apple Pay – generates huge recurring revenue streams.
For investors seeking balanced AI exposure, Apple offers tremendous upside with less risk than pure-play AI companies. This sleeping giant looks ready to re-awaken.
Alphabet – Search Giant Poised to Capitalize on AI
Google’s parent company Alphabet finds itself in an enviable position in the AI race. The tech conglomerate unveiled its Bard conversational AI chatbot to much fanfare, positioning it as a potential ChatGPT killer. Alphabet also has AI-infused search engine Gemini in its back pocket.
While Bard’s debut was rocky, it’s too early to count Google out. The company that pioneered internet search has unmatched data and resources to refine its AI models. Alphabet can also incorporate its new AI capabilities into Google’s ubiquitous apps and services, including Search, Maps and Google Assistant. This would instantly propel its AI to vast scale – Google fields billions of search queries daily.
Beyond AI, Google has its cash-cow digital advertising business, booming Google Cloud platform, burgeoning hardware division, self-driving car company Waymo and other futuristic moonshots. The stock appears attractively valued relative to other Magnificent Seven members. For investors seeking AI exposure coupled with Google’s diversified tech empire, Alphabet is a prime investment.
Amazon – E-Commerce Pioneer Aiming to Dominate AI
Amazon has rebounded strongly after a brutal 2022, with shares gaining nearly 60% in the past year. The e-commerce colossus has its sights set on dominating multiple new markets, with AI clearly in its crosshairs. Always an innovator, Amazon won’t hesitate to rapidly expand into promising technology areas.
Amazon introduced its conversational AI chatbot Q in late 2022. While Q remains a work in progress, Amazon has proven time and again its penchant for disrupting markets. The company will continue pouring resources into machine learning and natural language processing to boost Q’s capabilities. Combining Q with Amazon’s e-commerce platform, digital assistant Alexa, cashierless Just Walk Out technology and cloud computing power creates intriguing synergies.
AI aside, Amazon still has plenty of room to run in its core businesses. Despite its mammoth size, the company has less than 10% market share in global retail, showing its growth trajectory remains strong. Meanwhile, Amazon Web Services accounts for over 30% of the cloud infrastructure market – and cloud spending is projected to soar in coming years.
Investors seeking a high-growth tech stock would do well to consider Amazon. This pioneer has continually re-invented itself over the past quarter-century – disrupting new markets with innovations across e-commerce, cloud computing, artificial intelligence and more along the way. The next 25 years look just as promising as the last 25 for this magnificent company.
