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Magnificent 7 (Apple, Alphabet, Amazon, Nvidia, META, Microsoft, and Tesla) phenomenon is rarely seen in the stock market.
As of mid-2024, the total capitalization of Magnificent 7 companies was about $15.4 Trillion.There are no notable changes in VXX/VIX, and nothing changed
This is comparable to the total GDP of the five largest European economies (Germany, UK, France, Italy, and Spain) of $15+/-0.6 Trillion.
Does it make sense?
Today and in the next few issues, we will look at Magnificent 7 stocks in more detail.
Magnificent 7 Growth & Capitalization
Magnificent 7 companies had tremendous market capitalization growth in recent years. Specifically, their market capitalization grew from $1.1 Trillion in 2012 to $15.4 Trillion by mid-2024, or 14.5 times.
That corresponds to a CAGR of approximately 25%.
Magnificent 7 vs SPX & NDX
As another reference point, the charts below show Magnificent 7 companies' fractions of SPY and QQQ.
The chart below shows the market capitalization growth and corresponding share of Magnificent 7 companies between the years 2000 and 2024.
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A declining volume associated with rising prices shows stock distribution.
I posted a chart of Magnificent Seven with declining volume.
Distribution precedes a price decline because buyers become exhausted by it, but there is no accurate timing for reversal associated with distribution alone. It is a warning, though.
Magnificent 7. Distribution! Who is buying?
— BraVoCycles Newsletter (@BraVoCycles)
4:00 AM • Feb 9, 2025
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