"With a wide variation in valuation multiples and growth prospects, the Magnificent 7 group of mega-cap tech stocks is one of the most intriguing parts of the equity market to look at. By all accounts, these seven companies drive a significant percentage of the entire returns of most indices. As such, they deserve the microscope investors place on these names."
"And with many passive and active investors alike holding significant exposure to these companies if they hold nearly any index exchange traded fund (ETF), balancing out this overweight exposure can be difficult. For those looking to create their own unique diversified portfolio of stocks (via stock-picking, a strategy I'd argue should likely come back in vogue thanks to the over-representation of these stocks in the broader market), picking three of seven may sound like an easy task."
"With Warren Buffett recently adding Alphabet ( NASDAQ:GOOG) to his equity portfolio within Berkshire Hathaway (NYSE:BRK-B), investors are clearly eyeing this stock much more closely. That certainly makes sense to me. Alphabet's incredibly strong recent results have bolstered its investment thesis, even among those who have held this stock long-term. With surging revenue from the company's core cloud and search businesses, Alphabet's ability to integrate AI into its existing operations has many excited about the potential for a re-acceleration of both top and bottom-line earnings"
Magnificent 7 mega-cap tech stocks exhibit wide variation in valuation multiples and growth prospects while accounting for a significant portion of index returns. Many passive and active investors carry substantial exposure through index ETFs, complicating efforts to reduce overweight positions. Concentration within benchmarks may revive interest in stock-picking despite the difficulty of choosing a small subset. Alphabet recently drew increased investor focus after Warren Buffett added shares to Berkshire Hathaway; recent results show 16% revenue growth, driven by 33% cloud expansion and similar search growth. Alphabet's AI integration and businesses like Waymo and Gemini support expectations for renewed revenue and earnings acceleration.
Read at 24/7 Wall St.
Unable to calculate read time
Collection
[
|
...
]