MW BATMMAAN begins: These may be the dominant stocks for next year
By Barbara Kollmeyer
Broadcom muscles into club of tech giants after late-year surge
More than a decade after FANG became a popular way of grouping top-performing technology stocks, there's a new acronym in town.
Enter BATMMAAN, a term that has been making the rounds since another potential tech kingmaker - Broadcom - began closing in on the $1 trillion market cap club last week. The grouping is as follows: Broadcom $(AVGO)$, Apple $(AAPL)$, Tesla $(TSLA)$, Microsoft $(MSFT)$, Meta Platforms $(META)$ , Amazon.com $(AMZN)$, Alphabet $(GOOGL)$ and Nvidia $(NVDA)$. In other words, the "Magnificent Eight."
While CNBC's Jim Cramer was credited with the original FANG acronym - which stood for Facebook, which became Meta; Amazon; Neflix; and Alphabet - the new term appears to have first cropped up earlier this month in an article from Sherwood News' David Crowther, the founder and editor of Chartr. And the investing world is picking it up fast, as the group of tech stocks known as the Magnificent Seven gets replaced.
Shares of Broadcom, whose market capitalization is now up to $1.12 trillion, have been hoofing it higher after the maker of artificial-intelligence chips reported earnings last week in which executives forecast booming AI sales. That outlook helped spark the biggest ever one-day percentage gain for the stock of 24% in the following session.
Many have been calling that Broadcom's "Nvidia moment," in reference to 2023, when the latter's blowout results sent investors scrambling into the stock. Since that moment, Nvidia shares, even amid bouts of selling, have climbed 243%.
Read: Nvidia's stock may have lost its luster, but the rest of tech can still shine
Hedge funds appear to be piling into Broadcom, according to an analysis of monthly holdings from Your Weekend Reading that showed the chip maker at No. 8 among top equity positions at 338 hedge funds as of Dec. 16, becoming a top holding after not even appearing on that list earlier this year.
Year to date, Nvidia remains the biggest driver of BATMMAAN gains, up 163%, followed by Broadcom's late-year surge to 115% and by 93% for Tesla, 75% for Meta, 52% for Amazon.com, 39% for Alphabet, 31% for Apple and 20% for Microsoft - which incidentally is the top holding among hedge funds.
Read: Nvidia stock is in a correction. Microsoft's CEO may have just said something very worrying.
And for Wall Street, tech-stock dominance may remain the only game in town in 2025. Bank of America's December global fund managers survey reported that being long Magnificent Seven stocks continues to be the most crowded trade - 21 months and counting.
In a separate note to clients, the bank's strategists said that a market bust for the big tech stocks was now unavoidable, but that they would likely continue outperforming in 2025.
"Not owning enough U.S. stocks or large-cap stocks or tech stocks has been a painful stance for many years, and we think it's still a major risk in 2025," said a team led by Benjamin Bowler.
Read: This could be the 'next big thing' for the stock market after generative AI
And: This hot AI stock is set to harness huge opportunity as 'demand mojo' plays out
-Barbara Kollmeyer
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(END) Dow Jones Newswires
December 23, 2024 12:08 ET (17:08 GMT)
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