Wall Street’s most powerful collection of stocks, the Magnificent Seven, is looking a tad dated. Make way for the Great Eight. Or maybe the Golden Dozen. Or the TenAI of GenAI.
It has been almost three years since OpenAI’s ChatGPT made artificial intelligence the center of the global economy, and in that time one trade has dominated the U.S. stock market: Buy the Mag Seven. Comprised of Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta Platforms and Tesla, this septet was seen as best positioned to deliver huge returns to investors during the biggest technological shift since the internet.
While that has largely played out, a funny thing happened on the way to global dominance. The AI trade expanded in unexpected ways and moved beyond several of the market’s favorite big tech companies. So investment strategies based on the Magnificent Seven — which is responsible for more than half the S&P 500 Index’s 70%-plus rise since the start of 2023 — are missing some of the firms that are also expected to thrive in an AI future, such as Broadcom, Oracle and Palantir Technologies.
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