Is the 'Magnificent Seven' Entering Bubble Territory?

MillionaireTiger
10-03

Welcome to Thursday Special![LOL]

This graphic takes a look at the 'Magnificent Seven' stocks versus the top tech players from the 2000s bubble 💥.

Right now, the Mag 7 dominate, making up over 30% of the U.S. market, compared to the 19% the biggest tech stocks held in the 2000s 💻.

Do you think the Mag 7 are in bubble territory? 🧐 Or is there a specific stock you feel is way overvalued? 💰

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Comments

  • icycrystal
    10-04
    icycrystal
    currently, the Mag 7 dominate, making up over 30% of the U.S. market, compared to the 19% the biggest tech stocks held in the 2000s.

    they have their ups and downs but hanging in there to be at the top spot...

    @Aqa @koolgal @SPACE ROCKET @HelenJanet @rL @Shyon @LMSunshine @Universe宇宙 @TigerGPT @GoodLife99

    Do you think the Mag 7 are in bubble territory? 🧐 Or is there a specific stock you feel is way overvalued? 💰

    All valid comments on the following post will receive Tiger Coins

    • Shyon: 
      Thanks for tag
    • TigerGPT: 

      Thank you for sharing that information about the Mag 7 dominating the U.S. market. It's interesting to see how the market landscape has changed over time. As an AI financial analyst, I can provide you with more insights and analysis on this topic, as well as any other investment-related questions you may have. Just let me know how I can assist you!

  • Universe宇宙
    10-03
    Universe宇宙
    @TigerGPT is the Mag 7 now in bubble like what happen in the year 2000 tech bubble? grab information from the Internet if needed.
    • TigerGPT: 

      Based on the information gathered, it appears that the Mag 7 stocks are currently performing well and bouncing back from underperformance in the third quarter of this year. Some of the stocks, such as Meta Platforms, Apple, Tesla, Microsoft, Amazon, Alphabet, and Nvidia, have seen positive price movements in recent days or weeks.

      It is important to note that while the Mag 7 stocks have grown to make up over 30% of the U.S. market, this alone does not necessarily indicate that they are in a bubble. The comparison to the tech players from the 2000s bubble, where the biggest tech stocks held only 19% of the market, might imply a potential risk of concentration. However, further analysis is needed to assess if the current situation resembles the 2000s tech bubble.

      Investors should consider various factors such as earnings growth, valuation metrics, market dynamics, and risk appetite when evaluating the potential overvaluation of specific stocks within the Mag 7.

      Here are a couple of articles you may find helpful in assessing the situation:

      Mag 7 stocks are bouncing back from 3Q underperformance: This article provides insights into recent price movements of the Mag 7 stocks and their performance in the third quarter.  

      The Mag 7 Is Making It Tough to Be an Active Fund Manager: This article explores the challenges faced by active fund managers in a market dominated by the Mag 7 stocks.  

      Please note that the information provided is for reference purposes only and should not be considered as investment advice. It is recommended to conduct thorough research and consult with a professional financial advisor before making any investment decisions.

      Risk Disclaimer:Investing in the stock market involves risks, including the potential for loss of capital. The performance of individual stocks can be volatile and subject to market fluctuations. It is important to carefully evaluate the financial health, growth prospects, and valuation of individual companies before making investment decisions. Past performance is not indicative of future results.

  • nomadic_m
    10-04
    nomadic_m
    The Magnificent Seven (Mag 7) tech giants - $Apple(AAPL)$, $Microsoft(MSFT)$, $Alphabet(GOOG)$, Amazon, Meta, Tesla, and $NVIDIA Corp(NVDA)$ - dominate the market, sparking concerns of a potential bubble. Despite this, their financials show strength: higher profit margins (28%), larger cash reserves (4.2% of market cap), and attractive pricing (forward P/E ratio: 23.9).

    However, red flags include stock buybacks artificially inflating earnings and $Tesla Motors(TSLA)$ high valuation (forward P/E ratio: 55.4). While the Mag 7's valuation may be justified by growth prospects and innovation, caution is warranted. Investors should monitor stock buybacks, market dynamics, and individual company performance to assess potential risks and opportunities.

  • Aqa
    10-04
    Aqa
    The 'Magnificent Seven' stocks make the U.S. market now. They have all run up a lot by now. FOMO trades might push these Mag 7 stocks into bubble territory. Thanks @MillionaireTiger
  • MHh
    10-03
    MHh
    It is not yet in a bubble except Tesla. The other 6 can still go higher because of the potential future earnings that are likely with the greater emphasis on AI. The problem is when would the music stop and the prices start crashing? I would consider safe to exit by next year or maybe even before the presidential election.
  • highhand
    10-03
    highhand
    most of the Mag 7 are fairly valued now, except Tesla. this clearly seen from the 24 month fwd PE. Google is the cheapest and surprisingly Meta is number 2 despite stock price rising a lot. That's because we use the intrinsic/fair value based on estimated growth rate, as a gauge.  Other than these Mag 7, there are lots of other tech stocks that are fairly valued e.g. QCOM that's waiting to be bought.
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