The term “Magnificent Seven” traces back to the 1960 Western film but has since been adopted in the finance sector as the seven leading tech stocks in the world.
Apple (AAPL)
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Apple (NASDAQ:AAPL) has thrived across various market conditions. Despite concerns over a potential recession impacting its consumer discretionary business model, analysts advocate a patient long-term approach. The iPhone’s continuing growth and the highly-profitable services segment position it favorably for the long haul.
The iPhone’s revolutionary multi-functionality catapulted Apple to global dominance. Even today, the iPhone represents 58% of the company’s overall revenue, with services like iCloud and Apple Music contributing 19% to sales.
While the Vision Pro had a lackluster performance in the recent quarter, potential improvements could elevate its status, impacting share price. Moreover, CEO Tim Cook hinted at upcoming generative AI products, reflecting the company’s significant investment in AI integration, which could uplift the stock price.
Amazon (AMZN)
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AI represents a transformative technology in our era. Amazon (NASDAQ:AMZN) is at the forefront, emphasizing responsible AI use and advocating for effective regulatory frameworks to promote innovation.
Recently joining the U.S. Artificial Intelligence Safety Institute Consortium led by NIST, Amazon aims to set measurement standards for trustworthy AI development, which could position it as a leader in this space.
Owning AMZN stock provides exposure to two major global growth sectors: e-commerce and cloud services. The company’s retail segment achieved a holiday sales record, with ongoing improvements and rising Prime membership fees promising continued growth. CEO Andy Jassy’s focus on customer experience enhancements, especially evident in the rapidly expanding cloud services division, bodes well for sustained growth.
Meta Platforms (META)
Meta Platforms: A Top Contender in Digital Advertising
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Meta Platforms’ Impressive Performance
Facebook’s parent company Meta Platforms (NASDAQ:META) is a Magnificent 7 stock every investor should own. Surging more than 150% in 2023, the company has shown robust revenue and consistent profit growth. Meta’s recent earnings report also shows how impactful the stock is, given the fact META stock rose 20% post-release. Despite this reality, I still think META stock remains attractively-priced, making it a compelling investment opportunity.
Robust Financials
The company reported Q4 revenue of $40.1 billion, up 25% from the previous year. Via trimming costs by 8%, the company was able to triple its adjusted earnings to $5.33 per share. These figures surpassed consensus estimates. The company’s Q4 revenue also outperformed expectations, with a 16% increase. The full year showcased 73% increases and $14.87 per share due to improved operational efficiency and cost management.
AI Integration Driving Revenue Growth
In 2024, digital ad expenses is also expected to reach 13.2%. Meta’s advancement in the digital ad realm is attributed to AI integration. Leveraging AI across its ad systems, Meta has enhanced its monetization efficiency. Features like Advantage+ and generative AI tools aid advertisers, driving traction and promising early performance gains. The consensus analyst forecast suggests a 27% annual growth in AI adoption in digital marketing, with projected revenue reaching $79 billion in 2030.
Author’s Perspective
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
