Another Great Year for Six of the 'Magnificent Seven'

2024 was another great year for the so-called "Magnificent Seven", a group of mega-cap tech companies that dominate the headlines and play an outsized role in the performance of U.S. stock market indices. Nvidia, Meta, Tesla, Amazon, Alphabet and Apple all outperformed the S&P 500 by a significant margin, with Nvidia by far the biggest winner of them all. Once again, the chipmaker delivered on its promise of blockbuster growth, as other companies, first and foremost the remaining Mag Seven, spend tens of billions of dollars to build AI data centers to be ready for the AI-centric future.

The one company that underperformed the S&P 500 and its own ambitions last year was Microsoft. The company's share price saw a more modest 12-percent increase, as investors questioned whether and when Microsoft's huge investment in AI - capital expenditure surged 75 percent to $55.7 billion in the fiscal year ended June 2024 - would pay off.

According to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, the Magnificent Seven accounted for more than half of the S&P 500 25-percent return last year, with Nvidia alone contributing more than 20 percent.