Stock Market

The Magnificent 7 Stocks: What Can Investors Expect in 2024?

The Magnificent 7 stocks dominated the stock market and investing headlines throughout 2023. It will be remembered as the year artificial intelligence took off, resulting in massive growth. 

It was a strong year overall for the stock markets, with leading indexes like the S&P 500 rising by 24% during the period. However, The Magnificent Seven substantially outpaced most others as tech titans more than doubled overall.

That strong performance has left many wondering if the group has further to go in 2024. Opinions remain mixed, with some expecting the stock grouping to continue to rise and others expecting it to falter. Let’s look at three of The Magnificent 7 stocks and discuss what investors can expect of them in 2024.

Magnificent 7 Stocks: Nvidia (NVDA)

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Nvidia (NASDAQ:NVDA) had a phenomenal 2023 as artificial intelligence took off. The company was undoubtedly the biggest beneficiary of the AI boom. Most importantly, Nvidia’s stock improved drastically due to its ability to monetize the emergence of generative AI.

That truth starkly contrasts many other firms whose share price rose due to AI but did not monetize directly.

The company sold more than 500,000 of its H100 chips in the most recently reported quarter. Nvidia also reported $14.5 billion in data center revenues. More than any other AI firm, it turned AI hype into dollars in 2023.

So, 2024 doesn’t appear to be a year in which Nvidia slows down. Instead, investors should expect NVDA shares to remain strong.

Its H200 chips will launch in 2024. They’re expected to have 1.8 times the memory capacity of H100 chips, which are already wildly popular for generative AI and Large Language Model (LLM) applications. In other words, 2024 looks to hold even greater monetization potential for Nvidia, which should logically increase share prices.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT), like Nvidia, was also a massive AI beneficiary early in 2023 and throughout the year. However, its stock is under more pressure than Nvidia because it has not monetized AI to the same degree that Nvidia has.

That isn’t to say that investors should discount Microsoft’s potential in 2024. Instead, it is to say that Microsoft will continue to face that as a headwind. Market commentators have noted that Microsoft has been able to monetize AI to some degree. It has integrated AI into its CoPilot product, but it also continues to be priced for perfection in the minds of many.

That said, Microsoft’s P/E ratio is not exceptionally high. It certainly has been higher in the past decade.

There’s plenty of reason to remain optimistic about Microsoft in 2024. Its investment in OpenAI has substantial potential to grow stronger. Microsoft has the second-largest cloud computing business. Expect 2024 success to be built on the development of that cloud and growth due to AI.

Apple (AAPL)

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Apple (NASDAQ:AAPL) is arguably the most interesting of The Magnificent Seven stocks related to AI. It is a laggard of the group and hasn’t yet released an AI chatbot. However, Apple has recently begun to work on integrating AI into its business.

The thrust of that truth for investors is simple: Apple has incredible potential in 2024, and its muted adoption of AI could mean that its 2024 is similar to that which the other Silicon Valley giants experienced in 2023.

That isn’t the only reason for optimism around Apple this year. The Vision Pro will be released on Feb. 2. One will be a big signal to the market that augmented reality and virtual reality should be focal points for investors. Two, its introduction will mark the first new product release from Apple in more than a decade.

iPhone sales will continue to chart Apple’s course this year, but it is addressing its issues in China. A strengthening global economy due to cheaper lending could result in a massive change later this year.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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