A volatile rebound in the tech-heavy Nasdaq continues to shake up the Magnificent Seven stocks. In terms of market capitalization weighting on the Nasdaq, Apple (AAPL) is top dog, accounting for 10% of the index. At 9.4%, Microsoft (MSFT) is next, with Nvidia (NVDA) making up 8.6% of the Nasdaq.
But in a second-level changing of the guard, Amazon.com (AMZN) (5.8%) has just eclipsed Google parent Alphabet (GOOGL) (5.6%).
Longtime laggard Tesla (TSLA) is back above its 50-day moving average, but Broadcom (AVGO) threatens to swipe its Magnificent Seven card. The chipmaker now accounts for 2.3% of the Nasdaq, topping the 2.2% for Tesla. The electric vehicle maker and Broadcom have come in and out of seventh place in the market-cap rankings multiple times in recent weeks.
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Apple Intelligence Sets Up A New Chip War Between Cloud And Edge Computing
As a result of this week’s rebound in the indexes, IBD’s recommended market exposure level has improved to a bullish 60%-80%. 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
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What Are The Magnificent Seven Stocks?
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.
Nvidia And Apple Get The Glory. This Snubbed Stock Gets The Money.
What Percentage Of Nasdaq Are The Magnificent Seven 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.
| Company | Symbol | Market Cap Weighting (%)* | Comp Rating |
|---|---|---|---|
| Apple | (AAPL) | 10 | 89 |
| Microsoft | (MSFT) | 9.4 | 80 |
| Nvidia | (NVDA) | 8.6 | 97 |
| Amazon.com | (AMZN) | 5.8 | 94 |
| Alphabet Class C | (GOOG) | 5.6 | 66 |
| Alphabet class A | (GOOGL) | 5.6 | 69 |
| Meta Platforms | (META) | 3.9 | 93 |
| Tesla | (TSLA) | 2.2 | 67 |
*As of Sept. 12 |
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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