You may have heard that Tesla stock is down about 40% since the beginning of the year. This downward trend has led to other companies that make up the so-called “Magnificent Seven” (Microsoft, Apple, Nvidia, Alphabet, Amazon and Meta). Last week, Benzinga said, Magnificent Seven stocks had a combined market capitalization of 9,500 Despite these losses, the group's stock continues to dominate the S&P 500.
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Tesla's sales slump
Tesla's performance has been sluggish due to sluggish sales of electric vehicles (EVs) in the United States and other countries. Even in China, the world's largest EV market, Tesla has been overtaken in sales by Chinese company BYD, which sells EV models for less than $10,000. It's worth noting that this price range is much lower than the price of Tesla's cheapest model. Based on Tesla's declining performance, Bloomberg declared that Tesla has lost its place among the Magnificent Seven (now known as the Magnificent Six).
This begs the question of how the Magnificent Six will maintain its presence. Nael Fakhri, co-chief investment officer at Osterweiss, said these companies are too much for owners of U.S. stocks to ignore, as detailed by the Wall Street Journal. AI technology continues to grow strongly, meaning that his Nvidia, the leader in AI chips, is overtaking Tesla and thriving. Microsoft, on the other hand, has had strong first-quarter profits in recent years, beating earnings per share and revenue estimates over the past six years.
Bob Kallman, co-founder and senior portfolio manager at Miramar Capital, believes the stock market will see a significant drop in performance due to a significant drop in performance from the former Magnificent Seven and the current Magnificent Seven. He said other market sectors, such as industrial and financial, could offer better value. .
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What is the conclusion?
Magnificent Six's holdings haven't faced the same pressure as Tesla and seem to be doing well so far.
However, the future remains uncertain, including the question of whether the rapid rise in valuations of AI stocks will continue.
GOBankingRates Details
This article originally appeared on GOBankingRates.com: Are big tech stocks still worth investing in even if Tesla stock falls?
