By Elsa Ohlen
Investors looking to buy or sell shares of the Magnificent Seven may want to consider selling Microsoft and buying Nvidia.
The so-called Magnificent Seven is the group of megacap stocks that has driven much of the stock market's gains over the past few years. It includes Nvidia, Meta, Amazon, Alphabet, Microsoft, Apple, and Tesla.
However, these $1 trillion+ companies have not all fared equally well, Jefferies analysts led by Desh Peramunetilleke pointed out in research released Friday. They ranked the seven companies based on growth, sell-side sentiment, price momentum, valuation, yield, and more.
The best-rated stock according to this model is chip maker Nvidia, which has led returns among the Mag 7 since 2020. Google-parent Alphabet comes in second, followed by Facebook-parent Meta, and iPhone maker Apple.
While Nvidia ranks well across indicators, Alphabet stands out as the best anti-momentum value play, Peramunetilleke said. Tesla is the most volatile stock with extreme exposure to several factors.
At the bottom is Microsoft, ranking particularly low on Research & Development versus capital expenditure, price momentum, and growth and revisions. Tesla and Amazon.com are rated as number six and five, respectively.
Since 2020, Mag 7 stocks are up by an average 640% versus about 100% for the S&P 500 and now have a combined weight of 34% of the benchmark index, Peramunetilleke said.
Write to Elsa Ohlen at elsa.ohlen@barrons.com
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January 17, 2025 07:30 ET (12:30 GMT)
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