The Magnificent Seven are magnificent again. But, as always, some of the members have been doing more of the lifting than others. Notably, Nvidia (NASDAQ:NVDA | NVDA Price Prediction) and Microsoft (NASDAQ:MSFT) are the two outperformers of the cohort that have stood just a bit taller than the pack.
The big question going into the second half is whether these two big AI winners will widen the gap or if the other five Mag Seven firms will pick up the speed. Personally, I think the Mag Seven rally will broaden out, but investors must ensure they’re playing the long-term game, especially when it comes to the firms with less clarity on the AI game plan compared to Nvidia and Microsoft.
With Nvidia CEO Jensen Huang already shedding light on what comes after Rubin (Rubin Ultra, which is planned for 2027, and Feynman for 2028), it’s tough for AI innovators to have a concrete plan that far out into the future. Sure, it’s just three years out that Nvidia will unleash its Feynman GPU to the world, but three years is a very long time, as far as AI advancement is concerned.
In any case, this piece will look at three Mag Seven stocks that Deepwater Asset Management’s managing partner and long-time tech bull finds among the most attractive as the S&P starts the second half on a high note.
Nvidia
It seems like just about everybody is bullish on Nvidia stock these days. It’s the world’s largest company after having smashed through the $4 trillion market cap mark. And with a seemingly crystal clear AI runway over the next few years, it’s no mystery as to why investors are back aboard the high-flying AI chip titan.
Just because it’s a $4 trillion beast doesn’t mean it doesn’t have what it takes to be a $10 trillion titan at some point over the next three to five years. Of course, it’s always a good idea for investors to reset expectations after being rewarded with high triple-digit returns in a short duration.
However, Nvidia continues to show its AI muscle is far stronger than that of its closest rivals. Perhaps Nvidia’s reached a point where it’s untouchable as far as market share lead is concerned. With Citigroup recently raising its price target (to $190 per share) on the stock due to the anticipation of sovereign government demand, Mr. Munster is right to stick with the name as it demonstrates far more magnificence than its six peers in the Mag Seven.
Apple
Gene Munster is sticking with Apple (NASDAQ:AAPL) despite its lackluster first half that saw not a whole lot in the way of AI news or innovations. Indeed, Apple’s roadmap is far less clear than Nvidia’s, which pretty much knows what it’ll do in the next three years. At this juncture, Apple, a firm that’s been shrouded in secrecy regarding new products it hasn’t yet officially unveiled, we don’t even know when that Siri LLM is coming. Reportedly, Apple will be looking to go with OpenAI or Anthropic to revamp Siri.
In any case, not everything is as clear as its new, Liquid Glass user interface with regards to where Apple will be in a few years from now. Either way, sticking with Apple seems like a wise bet. It has the legendary ecosystem, and AI expectations have now been “reset,” according to Mr. Munster.
With weakness in iPhone sales, perhaps iPhone estimates have also overswung to the lower end. In any case, Apple stock, which has been beaten by Nvidia to the $4 trillion level, may be next to hit the milestone, with shares starting to gain ground in recent weeks. Though it’s impossible to know who Apple will team up with on Siri or whether or not it’ll buy Perplexity AI, I do think it’s wise to have faith in CEO Tim Cook, especially as it recovers from one of its most vicious bear markets in a while.
Top Gaining Stocks
Top Losing Stocks