Forget the "Magnificent Seven" stocks that drove most of the S&P 500's 2023 gains. That's ancient history. Investors want to know what 2024's most magnificent stocks will be.
And analysts call for seven stocks, including repeats like Nvidia and Microsoft but also new winners like Warren Buffett's Berkshire Hathaway and energy giant Exxon Mobil, to be this year's runaway S&P 500 value gainers, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. These seven stocks are expected to power 47% of the S&P 500's forecast $3.1 trillion market value gain in 2024 in the next 12 months.
Seeing more stocks outside of just the technology industry participate in the S&P 500's march higher is a big story for 2024. "Given how it's more probable than not that market breadth won't be as concentrated in 2024, sector allocations are likely to rise alongside the increased return dispersion," said Matthew Bartolini, Head of SPDR Americas Research, State Street Global Advisors.
Make Way For Two New Magnificent Seven Stocks
Tired of hearing about all the same giant stocks dominating the S&P 500? Buffett's Berkshire is about to shake things up analysts say.
Analysts say shares of the diversified company will jump more than 12% in the next 12 months. If that prediction materializes, the company would add $94.9 billion in market value or 3.1% of the index's gain. That's even more than the $61.1 billion Meta Platforms is seen adding to the index this year. So, Berkshire Hathaway bumped Meta out of the Magnificent Seven for 2024, analysts say.
And here's another shocker. In the age of clean energy, analysts still think shares of Exxon Mobil will soar more than 26% this year. If that happens, Exxon Mobil would single-handedly add $104 billion in market value, which is 3.4% of the S&P 500's total expected gain. In an ironic twist, Exxon Mobil is pushing Tesla out of the Magnificent Seven. Shares of the electric vehicle maker are seen dropping 1.4% this year to erase $42.7 billion in market value.
Five Of The Magnificent Seven Stay The Same
Of course, given their sheer size and influence, some of the Magnificent Seven of 2023 are expected to remain. But the order of their contributions is shuffled up a bit.
Analysts now think Nvidia will be the No. 1 market value contributor to the S&P 500 in 2024. The company's semiconductors are powering generative AI models. Shares of Nvidia are expected to jump nearly 33% in 2024. And if that's true, it would add nearly $400 billion to the S&P 500's value, or a staggering 13% of the index's total gain in 2024. And analysts' 33% gain prediction seems conservative given that the stock soared 240% in 2023.
If Nvidia delivers the market value gains analysts expect, it would top even Microsoft's contribution, which is seen adding 9.8% to the S&P 500's value. Shares of Microsoft are expected to rise nearly 11% this year, adding $300 billion to the S&P 500's value. Again, this expected gain is a fraction of the 57% the software giant rose in 2023.
Certainly, much hinges on how corporate profit shapes up in 2024. Right now, analysts are calling for a good year, rising more than 10%. But no matter what, many of the Magnificent Seven of 2024 are so dominant, they're almost in their own universe.
"All the S&P's eggs are nestled in one very specific basket," said Nicholas Colas of DataTrek Research.
Meet The Magnificent Seven Of 2024
Based on analysts' 12-month price targets
| Company | Ticker | Market value gain ($ bil)** | Sector | % of S&P 500 gain** |
|---|---|---|---|---|
| Nvidia | $399.9 | Information Technology | 13.1% | |
| Microsoft | 298.2 | Information Technology | 9.7% | |
| Amazon.com | 247.8 | Consumer Discretionary | 8.1% | |
| Alphabet | 187.4 | Communication Services | 6.1% | |
| Apple | 106.5 | Information Technology | 3.5% | |
| Exxon Mobil * | 104.5 | Energy | 3.4% | |
| Berkshire Hathaway* | 93.6 | Financials | 3.1% |
