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The AI boom has seen the rise of a new grouping of mega-cap tech stocks, known as the “Magnificent 7.”
The group’s combined market value has surged 60% this year to $11 trillion – almost triple the GDP of Germany.
Skeptics, however, have warned the rally in the seven stocks could fade soon as economic headwinds gather.
A new assortment of mega-cap tech stocks is ruling the S&P 500 this year, also known as the “Magnificent 7.”
They are the seven largest US-listed companies – tech behemoths Apple, Microsoft, Google parent Alphabet, Amazon and Meta Platforms – as well as two new entrants Nvidia and Tesla.
Thanks to a stunning tech-stock rally fueled by hype over artificial intelligence, the combined market capitalization of the group has soared 60% this year, or $4.1 trillion, to an eye-watering $11 trillion.
To put in perspective – that’s almost triple the size of Germany’s economy, which was valued at just above $4 trillion at the end of 2022, according to the World Bank.
Just last week, Apple’s valuation soared past $3 trillion, the first company ever to reach the milestone. The gains reflect the continued success of the firm’s high-tech products, such as the iPhone and the iPad, which have an ecosystem of services and other offerings built around them.
Microsoft is likely to be the next mega-cap tech stock to reach a $3 trillion valuation, according to Morgan Stanley.
The bank called the stock a “Top Pick” and said it has 22% upside potential from current levels thanks to its “pole position” in the generative AI race that should help it quickly monetize the trend.
Meanwhile, Santa Clara-based chipmaker Nvidia has surged nearly 200% this year, propelling the company into the trillion-dollar market-cap club for the first time in history.
It also amplified the wealth of the company’s CEO Jensen Huang to $39.2 billion, making him the 34th richest person in the world, per the Bloomberg Billionaires Index.
Tesla’s entry into the elite group is also justified. The Elon…