After smashing targets, Nvidia (NVDA) sparked a new gap-up that propelled NVDA stock past the 1,000 mark and onto a record high. Now the artificial intelligence giant is challenging Apple (AAPL) for the No. 2 ranking among Magnificent Seven stocks in terms of market cap weighting on the Nasdaq.
While Nvidia CEO Jensen Juang says Tesla (TSLA) is “far ahead” on self-driving vehicles, Tesla stock continues its slide. As a result, its market cap weighting on the Nasdaq has dropped to 1.7%, below the 1.9% score for Broadcom (AVGO).
Meanwhile, Microsoft teases a breakout and all-time high as Google stock flirts with yet another record high of its own.
All of this has led to a shake-up in the ranking by market cap of the Magnificent Seven stocks.
Microsoft leads the pack in terms of market cap weighting on the Nasdaq at 9.4% of the tech-heavy index. Apple holds the No. 2 spot, jumping to 9% of the Nasdaq. But Nvidia, which currently accounts for 8.4% of the index, looks to surpass the iPhone maker.
Sharing the highest-possible 99 Composite Rating with Google stock, Nvidia already clearly outpaces the 74 rating for Apple stock.
Read More Stories On Magnificent Seven Stocks
What Are The Magnificent Seven Stocks?
Just as Wall Street moved on from the Nifty 50 in the 1970s as the term’s popularity and usefulness waned, the so-called FANG or FAANG stocks have lost their bite. Replacing them in the lexicon du jour is the Magnificent Seven Stocks: Alphabet (GOOGL), Apple, Amazon (AMZN), Meta Platforms (META), Microsoft (MSFT), Nvidia and Tesla.
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From GOOGL, AAPL and AMZN to META, MSFT, NVDA and TSLA, the Magnificent Seven stocks account for around half of the weighting of the Nasdaq.
Unlike the price-weighted Dow Jones Industrial Average, the Nasdaq composite and S&P 500 indexes are market-capitalization weighted.
As a result, the combined market caps of the Magnificent Seven stocks have a disproportional influence on the Nasdaq composite and Nasdaq 100.
To help address this issue, the Nasdaq rebalanced the index on July 24. That reduced the individual weighting of the Magnificent Seven stocks. But the rebalancing simply changed the total weighting of these seven megacaps from over 50% to nearly 50%.
In short, the Nasdaq 100 remains heavily concentrated on these megacap growth stocks.
Top Funds Gorge On Nvidia, Meta And This Non-AI Sector
What Percentage Of Nasdaq Are The Magnificent Seven Stocks?
Here are the current individual market cap weightings of Alphabet, Apple, Amazon, Meta, Microsoft, Nvidia and Tesla. The weightings will, of course, change as their market caps fluctuate.
| Company | Symbol | Market Cap Weighting (%)* | Comp Rating* |
|---|---|---|---|
| Microsoft | (MSFT) | 9.4 | 86 |
| Apple | (AAPL) | 9 | 74 |
| Nvidia | (NVDA) | 8.4 | 99 |
| Alphabet Class C | (GOOG) | 6.5 | 99 |
| Alphabet class A | (GOOGL) | 6.5 | 99 |
| Amazon.com | (AMZN) | 5.7 | 88 |
| Meta Platforms | (META) | 3.6 | 96 |
| Tesla | (TSLA) | 1.7 | 37 |
*As of May 31, 2024 |
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Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.
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