2023 witnessed significant gains in the Magnificent Seven stocks, such as Nvidia, Microsoft, and Apple, propelled by the ascent of generative artificial intelligence (gen AI) within the tech sector. Nvidia saw a remarkable 239% surge in stocks, Microsoft rose by 57%, and Apple achieved a market valuation exceeding $3 trillion. The upward trend was widespread, although some entities fell behind in gen AI.
Generative AI, spearheaded by the launch of ChatGPT in late 2022, became a pivotal technology trend. Large language models enabled the creation of high-quality content, transforming the landscape for companies like Google, Facebook, Tesla, and others.
As we enter 2024, the Magnificent Seven continue to vie for dominance in consumer internet apps and enterprise markets. UBS analyst Solita Marcelli notes the market capitalization of these giants has more than doubled, emphasizing the significant resources required for complex AI models.
Analysts foresee intriguing developments in 2024 for each of the Magnificent Seven:
Apple: With a market valuation exceeding $3 trillion, Apple is rumored to be working on a generative AI chatbot. Additionally, expectations are high for an AI App Store by late 2024, enhancing monetization opportunities.
Microsoft: Amidst legal challenges, Microsoft's $13 billion investment in OpenAI is crucial. The integration of ChatGPT assistants into Office 365 and cybersecurity products is underway, marking a potential shift in the AI landscape.
Nvidia: The chipmaker, boasting a 239% stock gain in 2023, aims to maintain its lead over rivals by partnering with software makers and funding AI startups. Over 20 investments in AI startups in 2023 signal a commitment to the long game.
Google: Despite being a leader in AI for years, Google faces challenges in the conversational chatbot arena. The launch of Gemini, a large language model, is designed to compete with ChatGPT, with plans to integrate its capabilities into Bard and cloud computing services.
Meta (formerly Facebook): Meta's focus on gen AI features for search, chat, and messaging aims to enhance user experience. The introduction of Meta AI and the image-generating model Emu showcases the company's commitment to AI integration.
Amazon: Amazon, a longtime player in AI technology, is responding to the Microsoft and OpenAI threat by investing up to $4 billion in Anthropic, one of OpenAI's chief rivals. Partnerships with AI startups, including Hugging Face, demonstrate Amazon's strategy to safeguard its cloud business.
Tesla: As an AI pioneer in self-driving technology, Tesla, led by Elon Musk, navigates the AI landscape. Musk's involvement with xAI, a rival of OpenAI, adds an intriguing dimension to Tesla's AI strategy.
The Magnificent Seven's journey into 2024 promises continued AI innovations, shaping the tech industry's future landscape.
