Alphabet

David Vance

Strong

Gains

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<p class="has-drop-cap">Following a recent <a href="https://tokenist.com/the-sp-500-is-down-10-since-august-as-the-magnificent-seven-struggle/" rel="noopener noreferrer nofollow" class="deco-link">sell-off in the wider</a> market, the benchmark S&amp;P 500 saw a significant rebound over the past week, driven by a generally strong Q3 earnings season. As a result, the dominance of the ‘Magnificent Seven’ firms increased even further, now <a aria-label="representing over 70% (opens in a new tab)" href="https://www.morningstar.com/stocks/how-have-magnificent-seven-earnings-been-looking" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">representing nearly 70%</a> of S&amp;P 500’s gains in 2023.&nbsp;</p>
<h3 id="sp-500-rebounds-as-magnificent-seven-companies-excluding-tesla-post-strong-earnings">S&amp;P 500 Rebounds as Magnificent Seven Companies, Excluding Tesla, Post Strong Earnings</h3>
<p>Earlier this year, the <a href="https://tokenist.com/most-of-sp-500s-gains-driven-by-7-firms-others-up-less-than-5-ytd/" rel="noopener noreferrer nofollow" class="deco-link">Tokenist reported</a> on how the seven biggest tech giants listed in the US, also known as “The Magnificent Seven,” accounted for more than 50% of the S&amp;P 500 gains in 2023 amid the ongoing AI boom.</p>
<p>Following a series of positive earnings results over the past few weeks, the stock prices of companies witnessed a fresh boost, taking that number to almost 70%, according to Morningstar analysts.&nbsp;</p>
<blockquote class="wp-block-quote">
 <p>“Six of the Magnificent Seven have reported earnings, and they’ve been decidedly mixed,” he says. “Amazon, Meta, and Microsoft each reported better-than-expected results, hitting on all cylinders, and provided the market with a strong outlook. For these stocks, we increased our fair value estimates by 3% on average.”</p> <cite>– said David Sekera, Morningstar’s chief US strategist.</cite>
</blockquote>
<p>Tesla (NASDAQ: $TSLA) was the only company that failed to impress with its latest quarterly report, with the electric vehicle (EV) maker <a href="https://tokenist.com/bernstein-keeps-tesla-pt-at-150-says-its-looking-like-a-regular-auto-company/" rel="noopener noreferrer nofollow" class="deco-link">missing earnings and revenue estimates</a> and posting a sharp drop in total operating margins.&nbsp;</p>
<p>Google owner <a aria-label="Alphabet beat estimates (opens in a new tab)" href="https://www.cnbc.com/2023/10/24/alphabet-googl-earnings-q3-2023.html" target="_blank" rel="noopener noreferrer nofollow" class="deco-link">Alphabet (NASDAQ: $GOOGL) beat estimates</a> for earnings and revenue for its fiscal third quarter but witnessed a sharp stock price drop anyway as investors expected more from the company’s cloud and AI operations. Nevertheless, positive corporate numbers in the broader market drove the S&amp;P 500 5% higher over the past week.</p>
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<h3 id="nvidia-s-q3-earnings-expectations">Nvidia’s Q3 Earnings Expectations</h3>
<p>Meanwhile, the only Magnificent Seven company that hasn’t reported its latest earnings yet is Nvidia (NASDAQ: $NVDA), with the chipmaker set to reveal its results on November 21.</p>
<p>Following two monster reports this year, the AI and chip giant is estimated to report earnings per share (EPS) of $3.16 in the current quarter on revenue of $15.19 billion, <a href="https://finance.yahoo.com/quote/NVDA/analysis?p=NVDA" target="_blank" aria-label="per Yahoo Finance data (opens in a new tab)" rel="noopener noreferrer nofollow" class="deco-link">per Yahoo Finance data</a>. Meeting those numbers would mark a significant increase compared to the year-ago quarter when Nvidia posted adjusted EPS of $1.17 on revenue of $7.1 billion.&nbsp;</p>
<blockquote class="wp-block-quote">
 <p>“Expectations are exceedingly high for growth in its artificial intelligence business, and depending on its results, the stock could be in for a wild ride.”</p> <cite>– Sekera added.</cite>
</blockquote>
<p>The company’s shares soared roughly 215% in 2023 thanks to its vital role in the ongoing tech sector craze marked by generative AI solutions like ChatGPT. Last week, reports revealed that Nvidia may be forced to cancel $5 billion worth of AI chip orders to China due to recent export controls imposed by the US government.&nbsp;</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe>
<p><em><strong>Do you think the recent surge in the S&amp;P 500 was a temporary relief rally? Let us know in the comments below.&nbsp;</strong></em></p>
<p>The post <a rel="noopener noreferrer nofollow" href="https://tokenist.com/70-of-the-stock-market-gains-this-year-come-from-the-magnificent-seven/">70% of the Stock Market Gains this Year Come from the Magnificent Seven</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://tokenist.com">Tokenist</a>.</p>

70% of the Stock Market Gains this Year Come from the Magnificent Seven

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