This year, despite global stock markets facing pressure from high interest rates, economic uncertainty, and geopolitical risks, major U.S. technology stocks such as the “7 Magnificent” or Magnificent Seven continue to dominate the U.S. stock market and remain the focus of investors worldwide.
Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla remain key drivers of the U.S. capital markets. Data from recent years show that these seven companies still hold a large share of the U.S. stock market value, with over half the returns of the S&P 500 index coming from just a few firms in this group. Although there was a sharp downturn late in the third quarter due to sell-offs in AI and semiconductor stocks amid concerns of an AI bubble, causing some investors to question whether investing in tech stocks still justifies the risk,
looking back at the overall picture this year reveals that the tech group led by the “7 Magnificent” did not grow uniformly as before. Instead, market trends reflect a broader diversification of investments, with investors increasingly distinguishing companies that deliver clear revenue figures and profit margins to assess who can effectively convert technologies, especially AI, into actual income.
A key highlight of this year's performance is evidenced by the ability to generate strong free cash flow. Despite increased spending on research and development and investments in AI, cloud, and digital infrastructure, these companies maintain a robust customer base and ecosystems, along with the capacity to scale new technologies—further cementing their role in shaping the market's future.
This year clearly shows that the “7 Magnificent” remain a group with high growth potential. However, the market no longer views them as a single homogeneous group. Instead, emphasis has shifted towards the "quality of growth" rather than mere expectations, ensuring technology stocks continue to be core pillars of the global economy long term.
If one were to select the standout stock in the group this year, Nvidia clearly takes the lead. Nvidia has become central to global AI growth, driven by demand for processing chips for data centers and AI systems used by major tech companies, governments, and large organizations. This has propelled its revenue and profits to surge at exceptional rates, with profit margins well above typical hardware industry levels. Analysts view Nvidia not just as a stock with rapid price appreciation but as a company building the infrastructure for the AI economy—not only in the U.S. but expanding into new markets globally, especially Southeast Asia—making its performance significantly impactful for the tech sector.
Following closely are Microsoft and Alphabet, distinguished by their success in integrating AI into core businesses. Microsoft has embedded AI through Copilot into Office, Windows, and Azure, creating new enterprise revenue streams. Alphabet employs AI to strengthen its search and advertising businesses and push its cloud division closer to breakeven. Both companies demonstrate that AI is not merely a cost for big tech but a tool to protect and expand existing business lines.
Meta has restored investor confidence by controlling costs and enhancing advertising efficiency through AI. Amazon stands out with profit recovery after restructuring its retail operations and improving AWS efficiency.
Apple, while experiencing slower growth, remains strong due to its services revenue and ecosystem. Tesla continues facing pressures in its electric vehicle business but is still valued for its long-term potential in AI and autonomous driving.
Overall, this year Nvidia outperformed both the index and other large-cap stocks, followed by Apple, Microsoft, Alphabet, and Meta, which delivered returns exceeding the index over the long term. Apple and Microsoft lead in cash preservation, while Amazon and Tesla exhibit higher volatility but still outperform the market.
The 2025 summary reveals clearer market direction: new-era tech stocks are evaluated not only on growth but on winning the game, particularly by generating revenue from AI. Companies that generate more cash flow will be able to invest to "own the future" ahead of competitors. These firms remain key drivers of stock indices that shape global investment portfolios and dictate innovation timing across critical industries—from technology infrastructure to consumer technology.
Read more
Follow the Facebook page: Thairath Money at this link -