Magnificent Seven Stocks: Nvidia Slides, Tesla Reverses Higher; Apple Continues To Sell Off. Dubbed the Magnificent Seven stocks, Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms and Tesla lived up to their name in 2024 with solid gains.
Just as Wall Street moved on from the Nifty 50 in the 1970s as the term's popularity and usefulness waned, the so-called FANG or FAANG stocks have lost their bite. Replacing them in the lexicon du jour is the phrase Magnificent Seven Stocks: Alphabet, Apple, Amazon, Meta Platforms, Microsoft, Nvidia and Tesla.
The mega-cap leaders dubbed the “Magnificent Seven” have outperformed the stock market for several years. However, 2023 was quite impressive for the seven tech-focused US companies—Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA and Tesla.
The S&P 500 Index had a total return of 25.0% in 2024, with the Mag 7 accounting for 53.7% of the return. This concentration of performance highlights the unique market dynamics of recent years and underscores the challenges of comparing diversified portfolios to such a narrow group of dominant companies.
And you'll need to invest effectively, such as in a low-fee S&P 500 index fund. If you can invest $500 per month into the stock market and you earn its historical average annual return of roughly 10%, you'll be a millionaire in about 30 years. It will take about 21 years if you invest $1,250 per month.
Investors who think the Magnificent Seven will continue leading the broader market to new heights may want to consider an exchange-traded fund (ETF) that includes these seven companies. Here's why the Vanguard Mega Cap Growth ETF (MGK -1.55%) is an excellent choice if you are looking for top growth stocks in 2025.
(NASDAQ:AMZN) is arguably one of the best blue chip stocks to buy, as it is a market leader in e-commerce and cloud computing. While the stock was up by about 47% in 2024, there is room for additional gains owing to the investments the company is making to strengthen its growth metrics and long-term prospects.
Investing in an S&P 500 ETF will provide you exposure to all Magnificent 7 and FAANG stocks. It includes behemoths like Microsoft and Tesla, extending its clout across diverse sectors such as software development, hardware, electric vehicles, and artificial intelligence.
Last quarter, and for the fifth consecutive quarter, Nvidia reported sales and profits that blew past Wall Street expectations. The stock rose +37% in the second quarter alone.” Overall, NVDA ranks 5th on our list of best NASDAQ stocks to buy in 2025.
Each stock you invest in should take up, at most, 3.33% of your portfolio. “If each stock generates around $400 in dividend income per year, 30 of each will generate $12,000 a year or $1,000 per month.”
Wedbush's Dan Ives expects the technology sector to be a big winner this year, with Magnificent Seven members Nvidia (NVDA), Microsoft (MSFT), Tesla (TSLA), and Alphabet (GOOGL) among his top five “tech winners” for 2025.
Vanguard World Fund - Vanguard Mega Cap Growth ETF
This Vanguard index fund provides heavy exposure to Apple, Microsoft, Nvidia, and the other members of the "Magnificent Seven." The S&P 500 has advanced 23% year to date amid soaring interest in artificial intelligence (AI) stocks.
$3,000 X 12 months = $36,000 per year. $36,000 / 6% dividend yield = $600,000. On the other hand, if you're more risk-averse and prefer a portfolio yielding 2%, you'd need to invest $1.8 million to reach the $3,000 per month target: $3,000 X 12 months = $36,000 per year.
The S&P 500 has averaged annual gains of close to 10% over many decades, so this decade was an above-average one, turning $1,000 into almost $3,400 with dividends reinvested.