Investors See Rebound Opportunity in Magnificent 7 Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 55 minutes ago
0mins
Source: CNBC
- Market Rebound Signal: Mark Newton, head of technical strategy at Fundstrat, indicates that despite recent weakness in the Magnificent 7 stocks, the bullish trend in the U.S. equity market suggests investors should focus on relative strength to restore market confidence.
- Valuation and Market Dominance: According to research from Vanda, the Magnificent 7 has a combined valuation of approximately $22.62 trillion, with Nvidia leading at $5.13 trillion, highlighting its dominance in the market, even amid concerns about AI growth sustainability and competition from Chinese rivals.
- Infrastructure Investment Trend: Paul Meeks from Freedom Capital Markets notes that AI infrastructure building will be a key theme, with funds likely shifting from other investments into the Magnificent 7, as these companies are primary beneficiaries of hyperscaler spending.
- Retail Investor Enthusiasm: Analysts suggest that the Magnificent 7 will form part of the emerging Fab 10 amid surging AI demand, with retail investors showing record interest in SpaceX, reflecting strong market confidence in these companies.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 244.390
Low
175.00
Averages
280.01
High
325.00
Current: 244.390
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Cloud Computing Growth: AWS's revenue growth of 28% in Q1 marks its best performance in nearly four years, significantly outpacing the 19% and 12% growth in international and North American commerce, highlighting the rapid expansion of its cloud business.
- AI Investment: Amazon is spending $200 billion on artificial intelligence, with CEO Andy Jassy noting that as computing power increases, customer demand rises, suggesting a multi-year growth cycle ahead.
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Investors See Rebound Opportunity in Magnificent 7 Stocks
- Market Rebound Signal: Mark Newton, head of technical strategy at Fundstrat, indicates that despite recent weakness in the Magnificent 7 stocks, the bullish trend in the U.S. equity market suggests investors should focus on relative strength to restore market confidence.
- Valuation and Market Dominance: According to research from Vanda, the Magnificent 7 has a combined valuation of approximately $22.62 trillion, with Nvidia leading at $5.13 trillion, highlighting its dominance in the market, even amid concerns about AI growth sustainability and competition from Chinese rivals.
- Infrastructure Investment Trend: Paul Meeks from Freedom Capital Markets notes that AI infrastructure building will be a key theme, with funds likely shifting from other investments into the Magnificent 7, as these companies are primary beneficiaries of hyperscaler spending.
- Retail Investor Enthusiasm: Analysts suggest that the Magnificent 7 will form part of the emerging Fab 10 amid surging AI demand, with retail investors showing record interest in SpaceX, reflecting strong market confidence in these companies.
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- Oil Price Volatility: Oil prices initially surged over 2% after Iran threatened to close the Strait of Hormuz, but later retreated due to reported progress in peace talks with the US, highlighting the direct impact of geopolitical tensions on market dynamics and prompting investors to reassess energy sector risks.
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- Investment Return Potential: Amazon's investments in data centers are expected to yield massive returns, with AWS contributing 59% of profits despite the stock rising only about 7% in 2026, indicating strong profitability.
- Cloud Computing Growth: AWS's revenue growth of 28% in Q1 marks its best performance in nearly four years, significantly outpacing the 19% and 12% growth in international and North American commerce, highlighting the rapid expansion of its cloud business.
- AI Investment: Amazon is spending $200 billion on artificial intelligence, with CEO Andy Jassy noting that as computing power increases, customer demand rises, suggesting a multi-year growth cycle ahead.
- Valuation Attractiveness: Amazon's operating cash flow valuation is at a historical low, trading at 17 times compared to 32 times for Apple and 26 times for Alphabet, making it an attractive buying opportunity right now.
See More
Investors See Rebound Opportunity in Magnificent 7 Stocks
- Market Rebound Signal: Mark Newton, head of technical strategy at Fundstrat, indicates that despite recent weakness in the Magnificent 7 stocks, the bullish trend in the U.S. equity market suggests investors should focus on relative strength to restore market confidence.
- Valuation and Market Dominance: According to research from Vanda, the Magnificent 7 has a combined valuation of approximately $22.62 trillion, with Nvidia leading at $5.13 trillion, highlighting its dominance in the market, even amid concerns about AI growth sustainability and competition from Chinese rivals.
- Infrastructure Investment Trend: Paul Meeks from Freedom Capital Markets notes that AI infrastructure building will be a key theme, with funds likely shifting from other investments into the Magnificent 7, as these companies are primary beneficiaries of hyperscaler spending.
- Retail Investor Enthusiasm: Analysts suggest that the Magnificent 7 will form part of the emerging Fab 10 amid surging AI demand, with retail investors showing record interest in SpaceX, reflecting strong market confidence in these companies.
See More
Tech Stocks Drag Down Markets Amid Concerns
- Tech Stock Pullback: Alphabet's shares fell 5% due to AI concerns following high-profile executive exits, while Amazon and Microsoft dropped nearly 5% and 3% respectively, leading to overall market pressure and diminished investor confidence in tech stocks.
- SpaceX Stock Plunge: SpaceX's shares plunged 16% for the third consecutive day, extending its three-day decline to nearly 24%, as the company announced plans to raise at least $20 billion through a senior unsecured notes offering to fund its AI ambitions, highlighting urgent capital needs.
- Chip Stocks Rally: Ahead of earnings reports, Micron's stock rose nearly 7%, while AMD and Intel gained over 2% and 5% respectively, providing some support to the market and indicating sustained investor confidence in the semiconductor sector.
- Oil Price Fluctuations: Brent crude prices fell 3.31% to $77.90 per barrel amid progress in U.S.-Iran talks, although unresolved risks around the Strait of Hormuz indicate market sensitivity to geopolitical developments.
See More
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- Sanctions Relief Impact: The U.S. has agreed to waive Iranian oil sanctions for 60 days during high-level negotiations, a move that could allow more Iranian crude back into global markets, thereby easing supply concerns.
- Oil Price Fluctuations: Following the sanctions relief, oil prices have slid below $80, reflecting market optimism about future supply and potentially impacting global energy market stability and investor confidence.
- Tech Stock Decline: Despite positive news regarding Iran, the S&P 500 and Nasdaq fell as major tech stocks tumbled, with Alphabet, Amazon, Meta, and Microsoft seeing losses between 2% and 5%, indicating market concerns over tech valuations.
- SpaceX Financing Plans: Shortly after its IPO, SpaceX announced plans to raise up to $20 billion through an unsecured notes offering, even as its stock price slumped 16% for three consecutive days, wiping out $400 billion in market cap, which could affect its future capital structure and market performance.
See More
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- Carnival Earnings Preview: Carnival Cruise Line is set to report quarterly results on Monday, with shares up 25% over the past three months, although down 11% from February highs, indicating market concerns about its recovery potential.
- FedEx Earnings Outlook: FedEx will release its earnings after the bell, with a nearly 14% rise in stock price over the last three months, yet down 5% from last week's peak, reflecting cautious market sentiment regarding its profitability.
- Amazon Prime Day Survey: Amazon's Prime Day event runs from Tuesday to Friday, with a recent survey indicating that 27% of Americans plan to participate, down from 34% last year, suggesting a decline in consumer enthusiasm, with shares down 16% from May highs.
- Communication Services Sector Decline: The S&P Communication Services sector fell nearly 4% on Monday, with Netflix shares plummeting almost 6%, down 45% from last June's peak, highlighting significant challenges facing the industry.
See More
Mixed Market Close: Tech Stocks Decline Amid Leadership Changes
- Tech Stock Decline: Alphabet's stock fell over 5% following the announcement of Google DeepMind VP Jumper's departure, leading to a broader decline in major tech stocks, which may heighten investor uncertainty regarding the tech sector's future performance.
- Oil Price Volatility: Oil prices initially surged over 2% after Iran threatened to close the Strait of Hormuz, but later retreated due to reported progress in peace talks with the US, highlighting the direct impact of geopolitical tensions on market dynamics and prompting investors to reassess energy sector risks.
- Market Expectation Shift: The market is currently pricing in a 39% chance of a 25 basis point rate hike at the upcoming FOMC meeting, reflecting a cautious investor sentiment towards future monetary policy, which could influence market liquidity and investment strategies.
- Overseas Market Performance: European and Asian stock markets closed higher, with the Euro Stoxx 50 and Japan's Nikkei 225 rising by 0.29% and 1.55% respectively, indicating a divergence in global market trends that may provide some support for the US market.
See More
