Just as Wall Street moved on from the Nifty 50 in the 1970s as the term’s popularity and usefulness waned, the so-called FANG or FAANG stocks have lost their bite. Replacing them in the lexicon du jour is the Magnificent Seven Stocks: Alphabet (GOOGL), Apple (AAPL), Amazon (AMZN), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA).
X
From GOOGL, AAPL and AMZN to META, MSFT, NVDA and TSLA, the Magnificent Seven stocks account for around half of the weighting of the Nasdaq.
Unlike the price-weighted Dow Jones Industrial Average, the Nasdaq composite and S&P 500 indexes are market-capitalization weighted.
As a result, the combined market caps of the Magnificent Seven stocks have a disproportional influence on the Nasdaq composite and Nasdaq 100.
To help address this issue, the Nasdaq rebalanced the index on July 24. That reduced the individual weighting of the Magnificent Seven stocks. But the rebalancing simply changed the total weighting of these seven megacaps from over 50% to nearly 50%.
In short, the Nasdaq 100 remains heavily concentrated on these megacap growth stocks. Resurgent gains by Apple, Microsoft, Amazon, Google and the other Magnificent Seven stocks boosted the tech-heavy index as a result. Nvidia stock, Meta, Microsoft and Amazon stock have all launched recent breakouts, and Alphabet has bounced back above its 10-week line. Even Tesla stock has perked up, as it now tests that benchmark.
After the close Tuesday, Nvidia obliterated Q3 estimates.
Read More Stories On Magnificent Seven Stocks
What Percentage Of Nasdaq Are The Magnificent Seven Stocks?
Here are the current individual market cap weightings of Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla. The weightings will, of course, change as their market caps fluctuate.
| Company | Symbol | Market Cap Weighting (%)* | Comp Rating* |
|---|---|---|---|
| Apple | (AAPL) | 10.7 | 90 |
| Microsoft | (MSFT) | 10.1 | 99 |
| Alphabet Class C | (GOOG) | 6.3 | 97 |
| Alphabet class A | (GOOGL) | 6.2 | 97 |
| Amazon.com | (AMZN) | 5.4 | 88 |
| Nvidia | (NVDA) | 4.3 | 99 |
| Meta Platforms | (META) | 3.1 | 99 |
| Tesla | (TSLA) | 2.7 | 88 |
*As of Nov. 23, 2023 |
|||
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
YOU MAY ALSO LIKE:
Let’s Ask Bard: Is Google Stock A Buy Now?
Microsoft Hires Displaced OpenAI Executives, Securing Key AI Talent
3 Keys To Stock Investing
Spot Top Stocks To Buy And Watch With IBD Leaderboard
Identify Bases And Buy Points With Pattern Recognition