Magnificent 7 Stocks: What They Are and How They Dominate the Market

I'm sure you're all at least vaguely familiar with the so-called "Magnificent 7" designation for stocks, which has replaced the FAANG moniker.  This week's edition of U.S. News Invested goes into more detail about which companies make up this elite index and how they made the list.  

JANUARY 17, 2024 Invested Advice, rankings and stock market news for investors.

Good morning, investors. Markets fall amid bank earnings season, and the JetBlue/Spirit merger fails. Highlights of today's newsletter include our market insights plus these new articles: Magnificent 7 Stocks: What They Are and How They Dominate the Market How to Become a Financial Advisor What Is Net Asset Value? 7 Best Monthly Dividend Stocks to Buy Now 7 Best Vanguard Bond Funds to Buy TODAY'S FEATURED STOCK STORY Magnificent 7 Stocks: What They Are and How They Dominate the Market CNBC personality Jim Cramer is credited with coming up with the popular FANG acronym to describe mega-cap tech growth stocks Facebook, Amazon, Netflix and Google way back in 2013. Cramer expanded FANG to FAANG in 2017 when he added Apple to the mix. While all the original FAANG stocks continue to perform well, several other high-profile stocks have emerged in recent years to lead the market to new highs. In 2023, Bank of America analyst Michael Hartnett began using the phrase "Magnificent Seven" to describe these stocks, borrowing from the 1960s Western movie of the same name. In addition to these stocks being some of the most valuable companies in the entire stock market, they are all focused largely on secular technology growth trends such as artificial intelligence, cloud computing, online gaming, and cutting-edge hardware and software. FAANG may no longer cut it when it comes to capturing some of the largest, most influential tech companies in the market. Instead, some use the acronym MAMA ANT to remember the newer group of securities. Here's an overview of what every investor should know about the Magnificent Seven. Microsoft Corp. (ticker: MSFT). Microsoft is the world's largest software company and is known for its Windows operating system, Azure cloud services, LinkedIn social media platform, Office professional software suite and Xbox gaming brand. Microsoft is a market leader in professional software, and it has grabbed headlines in the past year thanks to its acquisition of Activision Blizzard and its AI innovation, which has been spearheaded by its roughly $13 billion investment in ChatGPT maker OpenAI. Through Jan. 12, Microsoft has generated a 1,218% total return for investors over the past decade. The median analyst price target for the stock is $415, suggesting 6.8% upside from its Jan. 12 closing price. Amazon.com Inc. (AMZN). Amazon was founded as an online bookstore back in 1994, but the company has expanded its business over the past three decades to become one of the largest online retailers, public cloud service providers and digital entertainment platforms in the world. Two of Amazon's biggest strategic shifts have been its acquisition of brick-and-mortar retailer Whole Foods and its launch of the Amazon Prime subscription service, which includes Prime Video streaming and fast, free delivery of millions of products. Amazon has even expanded into advertising as well. Amazon shares are up 691% in the past decade, and the median analyst price target of $180.50 suggests 16.7% additional upside ahead from its Jan. 12 closing price. Click here to continue reading.