At the heart of today’s market rally are seven companies worth more than most nations’ GDP combined.
“Magnificent Seven” or Mag 7 is essentially shorthand for the stocks that power Wall Street’s biggest swings.
Together, Apple (AAPL) , Microsoft (MSFT) , Alphabet (GOOGL) , Amazon (AMZN) , Meta Platforms (META) , Nvidia (NVDA) , and Tesla (TSLA) represent nearly $20 trillion in market value and an eye-popping 34% of the S&P 500’s weight.
That essentially means when these names jump, the entire market follows, and when they wobble, portfolios across the globe feel the effects.
With that level of scale, skeptics argue that their meteoric run has already peaked and that the stocks are too crowded and too big to keep climbing.
However, Jim Cramer doesn’t seem to be convinced by that logic. In fact, his latest call is challenging the very idea that these giants are nearing their limits.
Image source: TheStreet/Shutterstock
Jim Cramer says don’t trade the Mag 7
Jim Cramer argues that investors are getting it wrong when they assume the “best days are behind them” as far as the Mag 7 are concerned.
He said on “Mad Money” that this mindset is perhaps one of the “six most damaging words to your portfolio.” Instead of panicking, he believes investors should keep their composure. “Stop trading, people,” he urged. “Own it, don’t trade it.”
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According to Cramer, the Mag 7 share unique advantages that let them keep winning. “First, all these companies have tremendous balance sheets with essentially all the money in the world,” he explained. “Second, they have scale. They can expand and expand with more tentacles anywhere. Third, they reinvent all the time.”
Also, Cramer lauded Apple and the FDA approval for its Watch in detecting hypertension as proof that their innovation is going strong. He also noted Elon Musk’s $1 billion Tesla share purchase as a massive sign of conviction. Even Nvidia’s quick rebound from China-related headlines strengthened his stance.
“And I’m not going to tell you to sell heroes unless something changes that makes them feel a lot less heroic,” Cramer said.
Why Mag 7 stocks still move markets
As mentioned earlier, the Mag 7 refers to the seven mega-cap tech giants dominating U.S. stock markets. They’re seen as the primary growth, innovation, and investor sentiment drivers, especially in the realm of AI.
Magnificent 7 stocks include:
- Apple: $3.55 trillion; YTD -5%.
- Microsoft: $3.82 trillion; YTD +23%.
- Alphabet: $3.05 trillion; YTD +33%.
- Amazon: $2.50 trillion; YTD +5%.
- Meta Platforms: $1.93 trillion; YTD +31%.
- Nvidia: $4.28 trillion; YTD +32%.
- Tesla: $1.35 trillion; YTD +3%.
The Mag 7 are what might be called the profit engines of AI. Cloud leaders are pumping tens of billions into AI infrastructure, pushing Nvidia’s record sales growth.
Related: Elon Musk made one of his biggest bets on Tesla’s future
In contrast, Google’s Gemini surge and Microsoft’s AI-first cloud strategy continue pulling demand through the stack. That potent flywheel is why their earnings and capex guide the market’s risk-on/risk-off tone.
AI datacenter spending continues boosting GPU demand (Nvidia), monetization opportunities in search/ads (Alphabet), and AI features across platforms (Microsoft, Meta, Apple).
Also, it’s important to note that the Mag 7 account for roughly 34% of the S&P 500 by weight. Such an unusually high historical concentration can amplify both rallies and drawdowns for index investors.
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