BREAKING: Futures Rise, Crude Oil Dives
The battle for dominance among the top 3 Magnificent Seven stocks continues. For now, Apple (AAPL) maintains its lead, accounting for 9.9% of the market capitalization weighting of the Nasdaq. But after already eclipsing the 8.9% weighting of Microsoft (MSFT), Nvidia (NVDA) is hot on the heels of Apple stock. Nvidia stock now accounts for 9.7% of the tech-heavy index.
Meanwhile, boosted by a surprise Q3 earnings gain, Tesla (TSLA) has seen its weighting on the Nasdaq jump to 2.35, topping the 2.2% for Broadcom (AVGO).
In other Mag 7 news, Alphabet (GOOGL) has edged out Amazon.com (AMZN). The Google parent now makes up 5.6% of the Nasdaq, topping Amazon’s 5.5%. Meta Platforms (META) accounts for 4% of the index.
IBD’s recommended market exposure level currently stands at the highest-possible 80%-100%. The five-tiered system, a key part of The IBD Methodology, helps investors stay protected and profitable with sound risk management.
Are These Magnificent Seven Stocks A Buy Now?
Alphabet | Amazon | Apple | Meta | Microsoft | Nvidia | Tesla
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 Magnificent Seven Stocks: Alphabet (GOOGL), Apple, Amazon, Meta, Microsoft, Nvidia and Tesla.
From GOOGL, AAPL and AMZN to META, MSFT, NVDA and TSLA, the Magnificent Seven stocks account for around half of the weighting of the Nasdaq.
Unlike the price-weighted Dow Jones Industrial Average, the Nasdaq composite and S&P 500 indexes are market-capitalization weighted.
As a result, the combined market caps of the Magnificent Seven stocks have a disproportional influence on the Nasdaq composite and Nasdaq 100.
To help address this issue, the Nasdaq rebalanced the index on July 24. That reduced the individual weighting of the Magnificent Seven stocks. But the rebalancing simply changed the total weighting of these seven megacaps from over 50% to nearly 50%.
In short, the Nasdaq 100 remains heavily concentrated on these megacap growth stocks.
Here are the current individual market cap weightings of Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla. The weightings will, of course, change as their market caps fluctuate.
Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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The CHIPS Act, signed into law in 2022, provides federal funds to help seed semiconductor manufacturing plants in the U.S. (© Dave Cutler)
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