The Magnificent Seven: Outperformers and the Future of the Stock Market

The S&P 500's growth in 2023 has been driven by just three out of the "Magnificent Seven" stocks: Nvidia, Microsoft, and Apple. Nvidia has seen the highest total return since 2022, driven by surging demand for AI. Microsoft has recently outperformed the S&P 500, thanks to its investments in AI and its own generative AI solution. Apple, despite falling revenue, has shown strength in EPS and is expected to benefit from a recovery in smartphone sales growth. However, the stock most likely to outperform in 2024 and 2025 is Alphabet, which has underperformed but is undervalued and stands to benefit from increased digital advertising spending and investments in AI.