Heading into the middle of 2023, the Morningstar US Market Index is up 23% from its low set on October 14, 2022 and up 14.6% so far in 2023.
However, the market’s overall gains have been driven by just a handful of stocks.
The group of gunslingers dominating the rally have been dubbed by some as the “Magnificent Seven.” The stocks leading the charge are Nvidia, Tesla, Meta Platforms, Apple, Amazon.com, Microsoft, and Alphabet.
At the start of the year, these stocks were all down more than 25% from the market’s peak on January 3, 2022. All seven stocks closed 2022 with deeply negative returns. Tesla took the worst of the market beating, falling 65%, and Meta was close behind, down 64%. Nvidia and Amazon both lost 50%, while Alphabet declined 39%. Shares for Microsoft and Apple suffered the least, losing close to 25%.
Now these stocks have made a U-turn. As of June 20, Nvidia stock is up 192% in 2023, Tesla stock is up 112%, and Meta stock is up 134%. The shares for the other four firms are clocking gains north of 40%.
For some of the stocks, a key driver of this year’s rally has been investor excitement over these firms’ investments in generative artificially intelligent software. Nvidia saw its stock rally due to heightened demand for its chips, which have been used to train programs like Open AI’s ChatGPT. Microsoft, Alphabet, Apple, and Meta have ventured into using AI tools for their products and services. Tesla saw its stock rally at the start of June following news of its partnerships with Ford Motor and General Motors for their electric vehicles.