The ‘Magnificent Seven’ – bubble or room to run?

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We look at the seven largest companies in the US, their impact on the overall stock market and whether or not they’re approaching bubble territory.

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Published on 15 December 2023

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

It’s not uncommon to have a group of companies lead an index. In fact, in the US over the last 20 years, the top seven companies have typically accounted for between 10-20% of the index (S&P 500). But since around 2017, there’s been a consolidation of power. The top seven now account for 29% of the overall index.

The concentration at the top from the largest seven companies (the so called Magnificent Seven) is starting to draw comparisons to bubbles of the past.

Let’s see whether those comparisons have merit, and if these big names can still offer some value for investors.

This article isn’t personal advice. If you’re not sure an investment is right for you, seek advice. Investments can rise and fall in value, so you could get back less than you invest. Past performance isn’t a guide to the future and ratios