What If You Only Buy the Magnificent 7 Stocks?
(1:00) - What Is The Best Way To Gain Exposure To The Magnificent Seven?
(4:40 - Roundhill Magnificent Seven ETF: MAGS
(9:30) - Breaking Down The Recent Performance For The ARK Innovation ETF: ARKK
(17:20) - Invesco NASDAQ Next Gen 100 ETF: QQQJ
(25:30) - Episode Roundup: MAGS, QQQM, QQQJ, MOON, MGK, TSCO, ULTA, SMCI, ZM, COIN, ARKK
Podcast@Zacks.com
Welcome to Episode #387 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is joined by Neena Mishra, Zacks Director of ETF Research, to discuss how to get exposure to the Magnificent 7 stocks, either through ETFs or just by owning the individual stocks themselves.
With the Mag 7 now making up 29% of the S&P 500 index, and many of the Mag 7 stocks hitting new highs, why not just own the Mag 7 stocks and call it a day?
Neena has her favorite ETFs that will get you plenty of Mag 7 exposure, or you can buy individual stocks as well.
Mag 7 Stocks at New Highs
1. NVIDIA Corp. (NVDA)
NVIDIA is one of the largest companies in the world with a market cap of $1.5 trillion. Shares of NVIDIA are hitting new all-time highs in 2024, gaining 212% in the last year.
It’s not cheap. NVIDIA trades with a forward P/E of 48 but it’s expected to grow sales by 53% in fiscal 2025.
Should you own NVIDIA in your portfolio?
2. Microsoft Corp. (MSFT)
Microsoft is a $3 trillion market cap company, making it one of the largest companies in the world. Shares of Microsoft keep hitting new all-time highs in 2024 and are up 64.4% over the last year.
Microsoft is trading with a forward P/E of just 35.8, which makes it look cheap compared to NVIDIA. However, sales are expected to rise just 14.4% in fiscal 2024, which is considerably less than the blockbuster growth expected of NVIDIA.
Should you own Microsoft in your portfolio?
What About Growth Outside of the Mega-Caps?
Growth stocks other than the Magnificent 7 have been hitting new highs in recent months as well. You can own those stocks in Invesco’s NASDAQ NextGen ETF, which tracks the 101 to 200th largest companies in the NASDAQ.
Or you can own the individual components.
3. Super Micro Computer, Inc. (SMCI)
Super Micro Computer is the third largest position in the Invesco NASDAQ NextGen ETF. It has a market cap of $26 billion. Shares of Super Micro Computer are up a whopping 520% over the last year.
Yet Super Micro Computer is still trading with an attractive forward P/E of just 26.7. Sales are expected to jump 53% in fiscal 2024.
Should a smaller tech company like Super Micro Computer be on your short list instead of the Mag 7?
4. Tractor Supply Company (TSCO)
Tractor Supply is also a top holding of the Invesco NASDAQ NextGen ETF. But it’s not seeing the big returns of some of the technology names. Shares of Tractor Supply are up just 6% over the last year.
It trades with a forward P/E of just 22 but earnings are expected to rise just 3.3% in 2024.
Should investors consider growth stocks like Tractor Supply even if they’re not in technology?
5. Ulta Beauty, Inc. (ULTA)
Ulta Beauty has a market cap of $23.2 billion. It’s also a top position in the Invesco NASDAQ NextGen ETF. Shares of Ulta Beauty are down 4.1% over the last year.
It’s the cheapest of these NextGen stocks with a forward P/E of 18.8. Earnings are expected to rise 6.4% in fiscal 2025.
Should a retailer like Ulta Beauty be on your list of must-own growth stocks?
What Else do you Need to Know About Only Investing in the Mag 7 Stocks?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of MSFT and ULTA in her personal portfolios.]
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Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Tractor Supply Company (TSCO) : Free Stock Analysis Report
Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report
Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report
