Breakthrough achievements reported with Nvidia, Google's Alphabet, and Microsoft
The Resilient Magnificent 7: Nvidia and the Tech Giants Shine Amid Market Volatility
The Magnificent 7 index, a collection of seven tech and AI-focused powerhouses including Nvidia, has remained a significant player in the global stock market, despite recent volatility. The index, developed by Boersenmedien AG, is currently trading at around 180 points, and some analysts predict it could reach its previous high of 197 points in the coming weeks and months.
Nvidia, a key component of the Magnificent 7, has been a standout performer, with analyst James Schneider adjusting his earnings forecasts for the coming years, now expecting a higher net income by 2028 for Nvidia. Schneider maintains his "Buy" rating for Nvidia, seeing further upside potential from stronger investments in additional growth initiatives.
In fact, Nvidia and Microsoft have already hit new record highs in recent trading weeks. US investment bank Goldman Sachs has also raised its price target for Nvidia from $185.00 to $200.00 in the last trading week.
However, it's important to note that the tech sector, and by extension the Magnificent 7, is experiencing some shifts. Institutional investors have been reducing crowded positions, particularly hedge funds, which has led to the Magnificent 7 underperforming the S&P 500 by nearly 10 percentage points in early 2025. This "de-crowding" is reducing market concentration and shifting flows towards other sectors.
Despite this short-term underperformance, the Magnificent 7 continue to exhibit strong earnings growth, largely driven by their AI-related businesses. For Q3 2025 through Q1 2026, analysts forecast earnings growth rates in the 9.5% to 11.2% range for these companies, including Nvidia and Microsoft, supporting positive medium-term fundamentals.
The Magnificent 7 index is a significant player in the market, making up about 22% of the S&P 500 by market cap. However, some market strategists highlight slower growth and higher inflation risks in tech sectors, which could moderate valuations. Yet, the Magnificent 7's technological leadership and AI exposure continue to drive optimism.
It's worth mentioning that the author of this article holds positions in Nvidia, and Mr. Bernd Foertsch, the management and majority shareholder of the publisher Boersenmedien AG, also holds positions in Nvidia. The Boersenmedien AG has granted the issuer of the Magnificent 7 securities a license to use the index, and the agency receives remuneration from the issuer for the use of the index.
For investors interested in participating in the growth of the Magnificent 7, the Magnificent 7 Index (WKN: SL0JUT) allows almost one-to-one participation in the development of the seven leading US technology companies. More information about the Magnificent 7 Index and suitable derivatives can be found on the Boersenmedien AG's website.
As always, it's crucial for investors to conduct their own research and consider their individual risk tolerance when making investment decisions.
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- The strong earnings growth of Nvidia, driven by its AI-related businesses, suggests potential for investing opportunities in the tech sector, as predicted by analysts and reflected in the index's estimates for the Magnificent 7.
- The escalation in technology investments, such as those made by Nvidia, could be promising for business endeavors focused on innovation and AI, as evidenced by the continued optimism surrounding the Magnificent 7 index.
