Bank of America analyst Michael Hartnett popularized the “Magnificent Seven” as a stock term just over a year ago. The movie-inspired moniker refers to Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla, which accounted for half of the S&P 500’s total gains last year, according to a report from Morgan Stanley. Like the acronym FAANG before it, the "Magnificent Seven" has served as a strategy for some investors—raising the question of how much longer this particular basket of stocks will have an outsize influence.
Whether the term—a reference to an acclaimed 1960 western that Hartnett used in a May 2023 note to investors—has outgrown its relevance is up for debate. What’s not is that shareholders have been rewarded with a combined annualized return of over 46% in the last five years, compared to just over 13% for the S&P.
