This year, the S&P 500 is dominated by a new group of mega-cap tech stocks, commonly known as the Magnificent 7.
The top seven US-listed businesses include two newcomers, Nvidia and Tesla, as well as tech giants Apple, Microsoft, Alphabet, Amazon, and Meta Platforms.
High-Tech Giants Drive Market Value Surge
The overall market value of the group has increased by 60% this year, or $4.1 trillion, to an astounding $11 trillion thanks to a phenomenal tech-stock boom supported by excitement over artificial intelligence.
For comparison, the German economy, which the World Bank estimated to be worth just over $4 trillion at the end of 2022, is almost three times as large.
Apple became the first firm to achieve the $3 trillion value mark when it did so just last week.
The increases are a result of the company’s high-tech goods, such the iPhone and iPad, which have a thriving ecosystem of services and other products centered around them.
According to Morgan Stanley, Microsoft will probably be the next large-cap tech firm to attain a $3 trillion valuation.
126% Stock Increase Driven By AI And EV Innovations
Due to its leading position in the race for generative AI, which should enable it to quickly monetize the trend, the bank dubbed the company a “Top Pick” and claimed that it has a 22% upside potential from present levels.
As a result of a roughly 200% increase this year, Santa Clara, California-based chipmaker Nvidia has become the first firm in history to have a market capitalization of $1 trillion.
Jensen Huang, the CEO of the firm, saw an increase in his wealth as well, bringing it to $39.2 billion, ranking him as the 34th richest person in the world according to the Bloomberg Billionaires Index.
It is also appropriate for Tesla to join the elite group.
Thanks to price reduction for EVs, charging-tech agreements with rivals Ford and GM, and the investor frenzy surrounding AI, the Elon Musk-owned carmaker’s stock has soared by an impressive 126% this year.
Read more: Tesla Takes The Lead: Securing Top Four Spots As Most American-Made Cars