Microsoft Eroding Leadership among 'Magnificent Seven' Stocks
The 'Magnificent Seven' stocks are Apple (AAPL), Amazon (AMZN), Alphabet (GOOG)(GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). The term originated from Bank of America analyst Michael Hartnett in 2023, when he described the market-leading performances of these tech stocks.
The post-pandemic recovery was driven by the launch of OpenAI's ChatGPT in late 2022, sparking an AI race that benefited several technology companies. However, since then, Amazon, Microsoft, and Tesla have underperformed the S&P 500 for the past year, due to various concerns.
The one stock that stands out as a potential sell is Microsoft. Despite its recent 18% year-over-year revenue growth, led by 43% growth of its Azure business, there are several concerns that may undermine its performance in the future.