Magnificent Seven loses importance

Microsoft is likely the best-positioned of its Magnificent Seven peers to capitalise on the potential of AI, according to some investors. — Bloomberg

NEW YORK: The soft-landing scenario that investors see for next year points to further gains in US stocks. But it also dims the prospect of another stretch of wild outperformance for the technology giants that dominated in 2023.

One of the key themes behind the Magnificent Seven’s surge, which generated nearly two-thirds of the S&P 500 Index’s advance this year, appears to have faded in importance for investors: With recession fears swirling, the tech behemoths’ earnings growth, combined with robust cash flow and balance sheets, made them haven stocks.