The “Magnificent Seven” stocks – Apple, Amazon, Meta Platforms, Alphabet, Microsoft, Nvidia, and Tesla – have generated substantial returns but are currently facing various challenges. As of late 2023, Apple struggles with reliance on iPhone sales amidst supply chain issues, while Amazon battles competition from cheaper alternatives. Alphabet continues to deal with antitrust pressures, and Microsoft faces tensions with OpenAI. Tesla’s market position is affected by concerns over Elon Musk’s leadership.
In contrast, Nvidia is positioned to outperform the others due to strong growth in its AI chip market. With data center revenue growing from 39% of total revenue in FY 2022 to an expected 88% by FY 2025, Nvidia’s sales increased dramatically after the launch of ChatGPT in late 2022. It commands 98% of the data center GPU market and expects revenue to grow at a compound annual rate of 30% through 2028.
Key data includes Nvidia’s revenue growth figures: 58% in FY 2022, 41% in FY 2023, and 217% estimated for FY 2024. Analysts believe Nvidia’s consistent outperformance of earnings expectations positions it well for future growth in a rapidly expanding AI landscape.
