Will tech stocks be ‘magnificent’ again in 2024?

investmentnews.com:

What a difference a year and a nickname make.

The “Magnificent 7” conquered the investing landscape in 2023, more than doubling in value collectively. Like the “FANG,” “meme,” and “dotcom” crazes before it, what started as a cheeky moniker assigned to a handful of streaking stocks morphed into a must-own investment strategy all its own. Over the course of last year, the AI-powered septet of Amazon (up 81 percent), Apple (48 percent), Google (58 percent), Meta (194 percent), Microsoft (57 percent), Nvidia (239 percent), and Tesla (102 percent) were elevated into the seven wonders of the investing world.

By comparison, the S&P 500 – of which the Magnificent 7 make up more than 30 percent in terms of market cap – rose 24 percent last year, while the equal-weighted S&P 500 rang up 12 percent in gains for the entirety of 2023.

With all due respect to the “Nifty 50” of Wall Street yore, that’s just nuts!

Whether the Magnificent 7 will be able to achieve those monumental gains in 2024, or even come close, remains to be seen. History has shown that the market’s big winners rarely dominate two years in a row. As a result, the probabilities don’t favor a repeat performance, especially now that the secret is out and their earnings multiples are up. Way up. Nvidia, for example, finished the year trading at 65 times its trailing 12-month earnings.

So if it’s not the Magnificent 7 leading the way in 2024, what will it be?

“The Magnificent 7 had such a huge run-up because there was a large imbalance of buyers versus sellers. But as the year went on, that supply-demand imbalance dried up,” said Eric Amzalag, CEO and founder of Peak Financial Planning.

Amzalag believes health care and consumer staples stocks will be the big winners in