The era of the U.S. stock market’s “Magnificent Seven,” the big tech companies that enjoyed spectacular growth last year, is about to end as their share prices have gone in different directions, says analyst Mike O’Rourke, who first coined the term. , reports Markets Insider.

In April 2023, when O’Rourke first talked about the Magnificent Seven, 7 companies — Apple, Nvidia, Amazon, Microsoft, Meta Platforms, Alphabet (Google’s parent company) and Tesla — accounted for 88% of the gains recorded in the S&P 500 for the last 4 months since the beginning of the year.

Now he reveals in a report he called “RIP The Magnificent Seven Era” that the percentage is only 45%. Although by no means insignificant, O’Rourke points to the different evolution of the shares of the 7 companies to conclude that they no longer behave as a relatively unified bloc.

“I don’t see these names coming together,” he said in the report, stressing that “first, the Magnificent Seven are no longer moving in the same direction.”

The stock prices of these 7 companies soared last year amid huge enthusiasm for AI technology and the fact that the US economy managed to avoid a recession against almost all expectations.

Companies directly involved in the evolution of artificial intelligence, such as Nvidia, continue to grow, while others see other developments. The stock price of Nvidia, a company that makes graphics processing units (GPUs) used in AI systems, has risen 66% since the beginning of this year.

The company jumped 16% in one day after recently posting better-than-expected financial results. Meta’s share price also rose 20% in one day after financial data showed that last year’s cost-cutting plan had worked.

Not all of the “Magnificent Seven” of the American stock market are so great

On the other hand, Tesla, a company that CEO Elon Musk has spent years trying to portray as a technology company rather than a car company, has seen its stock drop 22% since the start of 2024.

“The difference now is that they offset each other by having opposite returns, rather than moving in the same direction,” Mike O’Rourke says of their impact on the stock indexes that include these companies.

Adding to the situation is the fact that between January and early February, Nvidia’s market capitalization increased by more than Tesla’s total value at the time.

Apple, until recently the world’s largest company by market capitalization, is somewhere between the two extremes, experiencing a period of stagnation as its share price has depreciated 1.45% since the start of 2024.

But with the share price of Microsoft, the main backer of the AI ​​company behind chatbot ChatGPT, up more than 10% since January, the company founded by Bill Gates has reclaimed its title as the world’s most valuable company.

Microsoft’s market capitalization is now about $200 billion higher than Apple’s, which is estimated at $2.8 trillion, while the company founded by Gates once again crossed the $3 trillion mark.