Magnificent breadth

After a stellar 2023, when the Bloomberg Magnificent 7 index tracking the performance of Apple, Amazon, Alphabet, Nvidia, Meta Platforms, Microsoft and Tesla returned 107% versus the All Country World index at 22%, all eyes are on those firms’ upcoming results. In 2023 the group’s earnings are estimated to have collectively risen 29%, compared to a half point decline for the remaining companies in the global index. Although typically grouped together as technology stocks by industry classification, the Magnificent 7’s revenues are highly diverse. As leaders across the internet, advertising accounts for 24% of the group’s revenues and ecommerce a further 22%. From mobile phones to cloud computing, technology hardware accounts for 18% of revenues, while software and services comprise 28%. We discuss prospects for the group in our recent paper, Consumer trends in 2024: The resilient shopper.

Magnificent 7 revenue distribution by segment, 2023

Source: Company filings, Bloomberg, January 2024