Key Facts About the “Magnificent Seven” in AI Development
In 2023, Bank of America analyst Michael Hartnett coined the term “Magnificent Seven” for tech giants excelling in the stock market, specifically highlighting their investments in artificial intelligence (AI). The companies included are Nvidia ($4.4 trillion), Microsoft ($3.7 trillion), Apple ($3.3 trillion), Alphabet ($2.5 trillion), Amazon ($2.4 trillion), Meta Platforms ($1.9 trillion), and Tesla ($1.1 trillion).
Meta Platforms has reported a 22% year-over-year revenue increase to $47.5 billion in Q2, driven by AI-enhanced user engagement. Meanwhile, Alphabet’s Google Search generated a record $54.2 billion in revenue, up 11.7% from the previous year, with AI Overviews attracting 2 billion users in Q2. Google Cloud also saw significant growth, with revenue of $13.6 billion, reflecting a 32% increase year-over-year and a $106 billion order backlog.
Meta currently trades at a price-to-earnings (P/E) ratio of 27.3, while Alphabet trades at a P/E ratio of 22.1, marking both as attractive long-term investment options amidst their AI advancements.
