The magnificent 7 US stocks profits now exceed almost every country in the world

The magnificent 7 US stocks profits now exceed almost every country in the world, per CNBC

he group of seven major U.S. tech companies, dubbed the “Magnificent 7,” now holds more financial power than nearly every other major country globally, according to recent research from Deutsche Bank.

The rapid growth in profits and market capitalizations of these tech giants—Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia, and Tesla—has surpassed that of all listed companies in almost every G20 country, the bank noted in a research report on Tuesday. Among the non-U.S. G20 nations, only China and Japan (with the latter just barely) have greater profits when their listed companies are combined.

Deutsche Bank analysts pointed out that the combined market capitalization of the Magnificent 7 alone would make it the second-largest country stock exchange globally, double that of Japan in fourth place. Microsoft and Apple, individually, have market caps similar to the combined listed companies in France, Saudi Arabia, and the U.K., they added.

However, this level of concentration has raised concerns among some analysts regarding related risks in both the U.S. and global stock markets.

Jim Reid, Deutsche Bank’s head of global economics and thematic research, warned in a subsequent note last week that the U.S. stock market is “rivalling 2000 and 1929 in terms of being its most concentrated in history.”

Deutsche analyzed the trajectories of all 36 companies that have been in the top five most valuable in the S&P 500 since the mid-1960s.

Reid noted that while large companies tend to drop out of the top five as investment trends and profit outlooks change, 20 of the 36 that have occupied that top bracket are still in the top 50 today.

“Of the Mag 7 in the current top 5, Microsoft has been there for all but 4 months since 1997. Apple ever present since December 2009, Alphabet for all but two months since August 2012 and Amazon since January 2017. The newest entrant has been Nvidia which has been there since H1 last year,” he said.

Tesla spent 13 months in the top five most valuable companies in 2021/22 but has now slipped to 10th place, with its share price declining by around 20% since the beginning of 2024. In contrast, Nvidia’s stock has continued to surge, gaining almost 47% since the start of the year.

“So, at the edges, the Mag 7 have some volatility around the position of its members, and you can question their overall valuations, but the core of the group has been the largest and most successful companies in the U.S. and the world for many years now,” Reid added.