The so-called Magnificent Seven mega-cap stocks have powered much of the S&P 500's gains. However, their dominant run may be ending, according to JonesTrading Chief Market Strategist Mike O'Rourke. O'Rourke pointed to recent earnings from Meta (META) and Nvidia (NVDA) that "shattered" expectations yet saw different market reactions. He notes the Magnificent Seven valuations have diverged "drastically," causing investors to "differentiate" between them rather than treat them as a uniform group. As growth moderates for these mega-cap stocks, O'Rourke expects "rotation" within the Magnificent Seven tech companies as investors compare valuations and future trajectories. He believes this could force funds into other promising areas of the market beyond the narrow mega-cap technology focus, like biotech and pharma. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Angel Smith
Younger investors — Millennials and Gen Z — seem to have FOMO as they are more likely to chase momentum behind earnings, according to Apex Fintech Solutions latest survey. Apex Fintech Solutions CEO Bill Capuzzi sits down with Yahoo Finance to discuss these FOMO trading trends observed from the most recent earnings seasons, especially across the Magnificent 7 tech stocks. "When I look at the data in terms of the pattern, those 26 and younger year olds, there was a bit of fear of missing out. The great earnings and the amount of activity in that name [Meta (META)] was significant compared to something like Uber (UBER), which also posted really good earnings," Capuzzi says. "What it tells me is you have this younger generation — this notion [of] Peter Lynch which is 'invest in what you know, invest in what you use' — in this case, you have this younger generation leaning into things they use today, number one, and number two, think that there's opportunity for that stock to continue to run." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Luke Carberry Mogan.
While equity markets (^GSPC, ^DJI, ^IXIC) are mixed as investors remain wary before new inflation data, the AI rally has continued for most of the companies involved, most notably Nvidia (NVDA). Commerce Street Capital President Dory Wiley joins Yahoo Finance to discuss the popularity of Nvidia and the market's attempts to balance the AI rally with the expectation of rate cuts. He also explains what investors need to keep in mind when trading these stocks. Wiley expands on his thoughts about Nvidia in this market: "I think you under-allocate Mag Seven...at your own risk. I think you gotta stay allocated and I think you have to tilt to some of your favorites like Nvidia, and that's been working. It's because there's fundamental reasons to do so. Microsoft, Nvidia, massive margins, massive market entrenchment and great return on equity, estimated earnings, estimated revenues continue expanding. You saw for Nvidia what they did -- their net income is what? Up almost 586%? What kind of company gets you that? A company like that warrants a euphoria." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Nicholas Jacobino