A strong start to the week saw significant gains among the ‘Magnificent Seven’ megacap tech stocks, with investors anticipating upcoming earnings reports. Tesla led the charge with a 4.3 per cent increase, while Alphabet followed closely, rising by 3.6 per cent. Nvidia and Apple both experienced rallies, each climbing by 2.8 per cent. This surge brought Apple’s market capitalisation to $US3.99 trillion.
The remaining members of the group—Amazon, Meta, and Microsoft—also performed positively, each settling at least 1 per cent higher. This collective performance significantly boosted market indices, reflecting strong investor confidence in the tech sector. The NYSE FANG+ Index advanced 1.8 per cent to 16,795.63, marking a new record high for the session.
According to Fundstrat Global strategist Hardika Singh, the earnings reports expected this week from five of these tech giants will be crucial in determining whether the current enthusiasm surrounding artificial intelligence is justified or indicative of a bubble. Singh noted that the Magnificent Seven are collectively projected to report an earnings growth of 15 per cent for the third quarter compared to 6.7 per cent for the remaining 493 companies in the FactSet data. The overall index is expected to report profits of 8.5 per cent.
Singh added, “AI is transforming every single industry, and as I keep repeating, we’re literally in such early innings for this secular cycle that being worried about valuations and froth would be short-sighted.” This perspective suggests a belief in the long-term potential of AI and its continued impact on market performance.
