Tech stocks were torn apart in 2022, with the Nasdaq 100 finishing the year down a staggering 32.54%. The bubble that had been building for more than a decade burst as rates skyrocketed and central banks tried desperately to fend off out of control inflation. Tech stocks were hit first and hit the hardest.
Source: Blackrock, correct as of 14 July 2023
Indeed, the Big Tech trade that was seen by many as the “no brainer” play of the decade prior was seemingly in tatters. And as investors tried to flee to safe harbours in 2022 – to cash or commodities or anything in between – questions of where the next big trade was would run rampant. It turns out the answer to that question was simply: To Big Tech. Markets might not repeat, but they surely rhyme. FANG stocks were simply to be replaced by a trendier moniker, what analysts were calling the “Magnificent Seven”.
Spanning the tech megacaps, the Magnificent Seven is made up of Amazon, Alphabet, Meta, Tesla, Apple, Nvidia, and Microsoft. In 2023, they accounted for 95% of the market’s returns, according to Sally Fang, from Swell Asset Management. So influential have the Magnificent Seven become that the Nasdaq 100 is undertaking a special rebalance to bring their weightings on the benchmark to under 40%!
To be sure, that growing influence has been driven by significant outperformance on the part of these seven stocks, both from an operational and a share price perspective. In terms of what’s next for the Magnificent Seven, analyst price targets suggest that these stocks might have just run ahead of themselves. An unsurprising fact given that YTD returns on the short end stand at 39%, and 221% on the high end. Save for Amazon and Alphabet, consensus analyst price target data suggests implied downside from where Apple, Meta, Tesla, Microsoft, and Nvidia trade at, as of 14 July.
Below we provide a scorecard of each stock in the Magnificent Seven before we head into US earnings season this July / August:
Amazon Scorecard
| Share Performance YTD | Q1 Revenue | Q1 EPS |
| +56.49% | $127.4B | $0.31 |
| Q2 Report Date | Q2 Revenue Estimates | Q2 EPS Estimates |
| 27 July | $131.2B | $0.35 |
Alphabet Scorecard
| Share Performance YTD | Q1 Revenue | Q1 EPS |
| +39.16% | $69.79B | $1.17 |
| Q2 Report Date | Q2 Revenue Estimates | Q2 EPS Estimates |
| 25 July | $72.8B | $1.33 |
Tesla Scorecard
| Share Performance YTD | Q1 Revenue | Q1 EPS |
| +157.08% | $23.33B | $0.85 |
| Q2 Report Date | Q2 Revenue Estimates | Q2 EPS Estimates |
| 20 July | $24.3B | $0.79 |
Meta Scorecard
| Share Performance YTD | Q1 Revenue | Q1 EPS |
| +151.25% | $28.65B | $2.20 |
| Q2 Report Date | Q2 Revenue Estimates | Q2 EPS Estimates |
| 27 July | $31.0B | $2.90 |
Microsoft Scorecard
| Share Performance YTD | Q3 Revenue | Q3 EPS |
| +42.53% | $52.86B | $2.45 |
| Q4 Report Date | Q4 Revenue Estimates | Q4 EPS Estimates |
| 27 July | $55.4B | $2.55 |
Nvidia Scorecard
| Share Performance YTD | Q1 Revenue | Q1 EPS |
| +221.18% | $7.19B | $1.09 |
| Q2 Report Date | Q2 Revenue Estimates | Q2 EPS Estimates |
| 23 August | $11.1B | $2.06 |
Apple Scorecard
| Share Performance YTD | Q2 Revenue | Q2 EPS |
| +52.35% | $94.84B | $1.52 |
| Q3 Report Date | Q3 Revenue Estimates | Q3 EPS Estimates |
| 4 August | $81.7B | $1.19 |
*Revenue and EPS estimates represent the average analyst estimate for the coming quarter and were correct as of 14 July, 2023.
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