The “Magnificent 7” – Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla – have been the darlings of Wall Street for the past few years. Their dominance in technology and their massive market capitalization have made them key drivers of the S&P 500’s performance. In 2024 they gained 63%, after rising more than 75% the year before. But will their reign continue in 2025?
2024 emerged as one of the better years for the financial markets, with the S&P 500 posting a robust 25% gain and the Nasdaq Composite, which tracks nearly all Nasdaq-listed companies, surging by 32%.
Over 55% of the top 30 companies by growth in the Nasdaq Composite were from the biotech and technology sectors, showing the market’s strong focus on innovation and technological advancement. Similarly, in the S&P 500, technology companies dominated, comprising about 30% of the top-performing companies, followed by utilities and energy sectors. The overarching theme across these sectors was artificial intelligence (AI), which played a massive role in driving the market.
We are on the cusp of a potentially transformative shift in the stock market, driven by the increasingly significant role of Artificial Intelligence (AI). A recent report from Goldman Sachs Research, penned by analyst Ryan Hammond, sheds light on these fascinating projections.