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The fate of the 'Magnificent 7' depends on rapid revenue growth in 2024 - Goldman Sachs

AuthorSam Boughedda
Published 02/05/2024, 08:38 AM
Updated 02/05/2024, 08:42 AM
© Reuters The fate of the 'Magnificent 7' depends on rapid revenue growth in 2024 - Goldman Sachs

According to analysts at Goldman Sachs, the fate of the "Magnificent 7" stocks depends on their ability to deliver rapid revenue growth in 2024.

The Magnificent 7 stocks are Tesla (NASDAQ:TSLA), NVIDIA (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOGL).

"Six of the 'Magnificent 7' tech stocks have reported 4Q results and all, but TSLA exceeded consensus sales estimates," noted the analysts. "The 'Mag 7' outperformance has persisted YTD with the group returning 8% YTD compared with 3% for the S&P 493."

They added that the premium valuation of the group reflects investor expectations that they will post three-year CAGR sales growth of 12% vs. 3% for the S&P 493.

"As the Dot Com boom showed, continued outperformance requires stocks to exceed the high bar set by consensus," wrote the analysts. "Although growth expectations are high, if estimates are realized and valuation remains unchanged, the group will outperform."

"If consensus estimates are realized, superior sales growth will likely lead the Magnificent 7 to outperform the S&P 493 during 2024," they added.

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