The Magnificent Seven group is clearly dividing, with artificial intelligence (AI) being the decisive factor in success or failure.
The group consisting of Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla no longer has consensus in the market. AI is highlighting who is truly pioneering and who is merely an observer.
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Nvidia, Microsoft, and Meta are leading thanks to their strong push in AI, while Apple, Alphabet, and Tesla are lagging behind.
Apple is falling behind in AI, while Alphabet is under legal pressure, and Tesla is repositioning towards robotics and AI.
The group's valuation is very high, but there is still potential for recovery or redirection among the companies behind.
What is the Magnificent Seven group and why is AI causing a divide within it?
The Magnificent Seven group consists of seven leading tech giants that have dominated the market for many years. However, according to The Wall Street Journal, the level of AI drive and approach to new technology has caused this group to no longer be in harmony.
Artificial intelligence is the main driver behind a new fair competition race among companies, exposing who is truly pioneering. For example, in 2024, Nvidia, Microsoft, and Meta grew by 20% or more, while Apple dropped by 16%, and Tesla fell deeply by 18%. Data from CNBC shows that the group still accounts for about 35% of the S&P 500's market capitalization.
Why are Apple and Alphabet lagging in the AI race?
Apple is delayed in realizing AI, with the launch of Apple Intelligence in 2024 not meeting expectations. Siri's upgrade has been postponed, and the company acknowledges that it will push the completion date to 2026.
Alphabet is facing significant pressure from antitrust investigations in the US and Europe. The rise of AI chatbots like ChatGPT threatens Google's dominant position in the search market. Nevertheless, Alphabet is still leveraging user data to develop AI like Gemini and presenting overarching AI on the search page, but skepticism remains.
AI will fundamentally change the tech game, and only those who invest systematically will win.
Michael Hartnett – Bank of America strategist, 2024
What is the situation for Tesla and its new direction?
Tesla's electric vehicle sales are slowing down, CEO Elon Musk is pivoting the company towards robotics and AI. They are preparing for shareholders to vote on investing in xAI, Musk's new AI project. However, the market still does not highly value this strategy, as reflected in the weak stock performance.
Analyst Dan Ives commented that the 'Magnificent Seven' group is splitting into a 'cool kids table' led by Nvidia, Meta, Microsoft, and a 'less cool table' with Apple, Tesla, and Alphabet hoping to join the leading group.
How are Nvidia, Meta, and Microsoft leading?
Nvidia stands out as its stock has more than tripled in two years, with a market value of $4 trillion thanks to booming AI chip demand. Meta and Microsoft also made strong impressions with their AI investments and received praise from investors.
Amazon, while experiencing slight growth of 3% this year, faces difficulties due to tariffs, but its investment in Anthropic bolsters its AI ambitions.
Nvidia is in a league of its own, excelling to become the first company to reach a valuation of $4 trillion thanks to AI.
Wall Street Journal, 2024
What are the current valuations of the Magnificent Seven group?
6 out of 7 companies currently have a P/E ratio above 25 times projected earnings, higher than the S&P 500 average of 22.35. Alphabet is the only exception with a P/E below this level. Despite the widening performance gap, many investors believe that the lagging companies still have financial power and strong brands to adjust strategies or acquire tech companies that support AI.
Will the divide within the Magnificent Seven group last?
Many experts warn that this phenomenon is not occurring for the first time. Previously, the FAANG group dominated the market and then collapsed in 2023. The demand for innovation and adaptability to AI will determine who remains in the tech game.
Frequently Asked Questions
Which companies are part of the Magnificent Seven group?
The group consists of Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla, which are the world's leading technology companies.
Why is AI causing a divide in the Magnificent Seven group?
AI is the decisive factor for growth, with companies heavily investing being favored by investors, while those slow to adapt are being left behind.
What challenges are Apple and Alphabet facing with AI?
Apple is delayed in upgrading AI, while Alphabet is facing legal pressure and competition from new AI chatbots like ChatGPT.
How is Tesla pivoting in the field of AI?
Tesla is focusing on robotics and AI, calling on shareholders to invest in the xAI project, but the market has not yet valued it highly.
How to track the performance of the Magnificent Seven group?
Tracking stock indices and quarterly financial reports from CNBC, WSJ, and reputable sources is the best way to stay updated.
Source: https://tintucbitcoin.com/ai-tac-dong-den-nhom-tien-so/
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