The Magnificent Seven group has become so big that they are effectively countries and not just companies in scale, according to a macro report by Deutsche Bank Research published on Tuesday.
In a note called “A Macro Guide to the Magnificent Seven,” DB analysts said that the Magnificent Seven stocks — Alphabet (GOOGL), Apple (AAPL), Amazon (AMZN), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) — make more profit in one year than listed securities in all non-U.S. countries, excluding China and Japan.
These “Mag 7” stocks have a combined market cap size that would make it the second largest country stock exchange in the world, analysts headed by Galina Pozdnyakova said.
France ($3.9T), Saudi Arabia ($3T), the United Kingdom ($3.18T), Microsoft (MSFT) ($3.9T) and Apple (AAPL) ($2.89T) have market caps that are very similar.
In addition, Apple (AAPL) annually makes about 60% of the profits of a very broad index of French stocks, or over half of German stocks.
“They have already impacted global risk sentiment in recent years, and especially in recent months, and no market participant can ignore them in whatever asset they look at,” analysts said. “Their size has left the S&P 500 (SP500) at its most concentrated since the 1929 bubble.”
On Monday, however, the magnificent seven underperformed by 0.83% with a pullback from tech, dragging the S&P 500 (SP500) to a decline of 0.09%.
Tesla (TSLA) declined by 2.81% and is now the second worst performer in the S&P 500 (SP500) so far this year, down 24.3%.
Nvidia (NVDA) reached new all-time highs on Monday, up 0.16%, and has been the best performing stock in the S&P 500 (SP500) year-to-date. It is up 46.65% year-to-date, adding $561B to its market cap.
“This six-week gain for Nvidia (NVDA) is larger than the entire market cap of the largest company in Europe,” which is Novo Nordisk (NVO) at $540B. “Indeed, Nvidia (NVDA) briefly surpassed Amazon (AMZN) to be the fourth largest fully listed company in the world yesterday, rising more than 3% earlier in the session as chipmaker sentiment benefited from dramatic gains for ARM Holdings (ARM),” which is up 29.3% yesterday and up 93.4% over the past three sessions last week, analysts showed.
Analysts also explained how globalization, the adoption of the internet and mobile subscriptions — and now the integration of artificial intelligence — have changed the scale of the earnings wallet for tech companies.