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).
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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. But the Nasdaq as a whole and several Magnificent Seven stocks have have run into some resistance.
Nvidia stock, Meta, Microsoft and Amazon stock have all launched recent breakouts. But NVDA and Google stock, in particular, have taken a haircut, slipping below key moving averages.
MSFT stock and AMZN stock closed the week in buy range, while Nvidia and Meta stock ended just below their recent buy points.
Tesla stock has perked up somewhat, moving back above its 50-day line. But the EV leader posted three down days as deliveries of Cybertruck just began, four years after Tesla announced the unique-looking vehicle.
On Nov. 21, Nvidia obliterated Q3 estimates but has retreated below buy range as fears of potential pitfalls for Nvidia emerge. On the Apple stocks news front, the king of Cupertino’s post-earnings rally stalls on soft iPhone sales data. But AAPL stock continues to set up a 192.93 buy point in a cup with handle.
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 | 99 |
| Alphabet Class C | (GOOG) | 6 | 93 |
| Alphabet class A | (GOOGL) | 5.9 | 93 |
| Amazon.com | (AMZN) | 5.4 | 92 |
| Nvidia | (NVDA) | 4.1 | 98 |
| Meta Platforms | (META) | 3 | 98 |
| Tesla | (TSLA) | 2.7 | 85 |
*As of Dec. 2, 2023 |
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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