Magnificent 7 Becomes ‘The Magnificent One’: Wall Street Guru Hails Single Tech Stock As Market Leader
Seasoned Wall Street investor Ed Yardeni, founder and CEO of Yardeni Research, has boldly rebranded the Magnificent Seven giants as the “Magnificent One,” referring only to Nvidia Corp. (NASDAQ:NVDA) as the key driver of this year’s market gains.
Yardeni noted that the semiconductor giant has rallied by 115% year-to-date, more than three times as much as Meta Platforms Inc. (NASDAQ:META) – the top performer among the “Magnificent Six” – and more than 10 times as much as the broader S&P 500 index, as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY).
“Nvidia is the only clear beneficiary of the AI boom currently because everyone who wants to play has to pay for the company’s expensive GPU chips,” Yardeni said.
However, he cautioned that the heavy capital expenditures could affect the profitability of Nvidia’s clients, who may not all emerge as winners in the AI competition.
Read also: AI-Driven Rally Set To Expand To Power, Commodities, Utilities: ‘It’s Not Just About Nvidia Anymore’
Chart: Nvidia Plays Its Own League In The Year-To-Date Ranking
Economic Implications Of The AI Expansion: The Roaring 2020s
“In our Roaring 2020s scenario, the technology boom should continue to shrug off the Fed and power productivity, economic growth, and the stock market higher.”
Yardeni explained that the Fed’s monetary policy is only one of several economic drivers, and they won’t need to reduce rates to support economic growth if productivity increases.
Nvidia recently reported an “incredible earnings report,” with quarterly net income surging from $2.0 billion in the previous year to $14.9 billion.
“That further confirms our thesis” of a Roaring 2020s scenario, Yardeni said.
The Wall Street veteran believes the market began to reflect the Roaring 2020s scenario on Nov. 30, 2022, with the release of OpenAI’s ChatGPT. Since then, Nvidia has propelled the S&P 500’s semiconductor indexes to new heights.
Yardeni assigns a 60% chance to the Roaring…
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