As technology stocks staged a formidable comeback last year, the spotlight shone brightly on the elite “Magnificent Seven” stocks. These renowned names led the charge in the Nasdaq Composite in 2023, propelling the tech-focused index to a 43% gain. With the index hovering just below an all-time high, the stage is set for a new era of stock market prosperity.
Let’s delve into the standout performances of these companies last year:
- Nvidia (NASDAQ: NVDA): Up 239%
- Meta Platforms: Up 194%
- Tesla (NASDAQ: TSLA): Up 102%
- Amazon: Up 81%
- Alphabet: Up 58%
- Microsoft: Up 57%
- Apple: Up 48%
Despite their remarkable performances, a duo of Wall Street analysts see more room to grow, projecting potential gains of 78% and 80% for two of these stocks in the upcoming year.
Image source: Getty Images.
A Bright Outlook for Nvidia
Anticipated 78% Surge
2023 witnessed generative artificial intelligence (AI) coming into its own, driving market growth with its innovative algorithms. Among the Magnificent Seven, Nvidia stood out as a frontrunner in leveraging this trend. The company’s GPUs revolutionized the video game industry by ushering in lifelike graphics through parallel processing, a groundbreaking innovation.
With its processors tailored for the burgeoning field of AI, Nvidia capitalized on the rise of generative AI last year. The company recently reported its third consecutive record quarter and foresees ongoing triple-digit growth. For the fiscal 2025 first quarter ending April 30, Nvidia projects record revenue of $24 billion, a striking 234% increase year-over-year, fueled by the rapid adoption of generative AI.
Rosenblatt analyst Hans Mosesmann, a vocal Nvidia supporter, reiterated his bullish stance on the stock, raising his price target to $1,400. Mosesmann envisions an additional 78% surge for Nvidia, attributing it to the early stages of an unprecedented growth cycle.
Mosesmann echoes CEO Jensen Huang’s belief that AI will drive a monumental upgrade cycle in data centers. With a massive $1 trillion installed base, Nvidia, commanding a 95% share of the GPU market in data centers, is poised for substantial gains.
While skeptics argue Nvidia’s valuation is steep, dismissing it as shortsighted, the company’s triple-digit growth rates justify its position. With a price/earnings-to-growth ratio below 1, Nvidia emerges as the most attractively valued among the esteemed Magnificent Seven.
Eyeing Tesla’s Potential
Predicted 80% Upswing
Despite a stellar performance in 2023, some investors have turned bearish on Tesla. Yet, the company achieved remarkable milestones, such as the Model Y becoming the world’s top-selling car. Tesla’s goal of 50% annual growth in vehicle production remains intact, though inevitable cyclical fluctuations are expected.
Management’s 2024 outlook hints at a slower growth trajectory, dampening investor sentiment and triggering a stock slide. Unperturbed by short-term challenges, Morgan Stanley analyst Adam Jonas maintains an upbeat stance on Tesla, setting a high price target of $345, translating to an 80% potential upside.
Jonas notes a prevailing bearish sentiment toward Tesla among institutional investors but underscores the company’s multi-faceted portfolio, spanning energy, AI, and robotics. Tesla’s track record of reshaping the electric vehicle landscape reinforces its long-term potential for growth.
As Tesla continues to defy expectations and innovate, counting it out would be a premature misstep.
