Gains from ‘Magnificent 7’ Stocks and S&P 500 Not as Expected in Q3
But there’s still a way to play the group, comprised of Nvidia, Meta Platforms, Amazon, Microsoft, Apple, Alphabet, and Tesla, according to Trivariate Research’s Adam Parker.
“Our advice has been and remains to stay market-weight this group, as low idiosyncratic risk, lack of replicability, and massive coverage make it challenging to generate sustained alpha,” the former chief U.S. equity strategist at Morgan Stanley said in a Sunday note to Trivariate clients.
Parker expects the Big 7 stocks to continue faring well even if recent inflationary concerns endure, noting that the group is seen as including the prime beneficiaries of the widespread application of artificial intelligence and has seen better earnings revisions than other areas of the market.
— ‘s Michael Bloom contributed reporting