Investors hesitant to bet against the highflying megacap tech stocks
- Short interest in the ‘Magnificent Seven’ tech stocks is at an all-time low
- Combined market capitalization of the group is nearly $11.3 trillion
- Long-only funds are overweight every member of the group except Apple and Tesla
- Wall Street strategists believe these companies can continue to outperform
- Expected earnings growth for the ‘Magnificent Seven’ dwarfs that of the rest of the S&P 500
Short interest in the ‘Magnificent Seven’ tech stocks, including Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta Platforms, and Tesla, has reached an all-time low. The combined market capitalization of these companies is nearly $11.3 trillion, with Apple alone accounting for over $2.8 trillion. Long-only funds are heavily invested in the group, except for Apple and Tesla. Despite concerns about stretched valuations, Wall Street strategists believe these companies can continue to outperform, thanks to their strong balance sheets and prospects for earnings growth. Expected earnings growth for the ‘Magnificent Seven’ far exceeds that of the rest of the S&P 500. As a result, short sellers are hesitant to bet against these highflying megacap tech stocks.
Factuality Level: 7
Factuality Justification: The article provides information about the short interest in the ‘Magnificent Seven’ companies and their market capitalization. It also includes opinions from Wall Street strategists about the potential performance of these companies. The information provided is based on data from Bank of America and FactSet. However, the article lacks in-depth analysis and may benefit from providing more context and diverse perspectives.
Noise Level: 3
Noise Justification: The article provides some relevant information about the short interest in the ‘Magnificent Seven’ companies and their market capitalization. However, it lacks depth and analysis, and there is a lot of repetition of information. The article also does not provide evidence or data to support its claims about the companies’ prospects for outperformance.
Financial Relevance: Yes
Financial Markets Impacted: The article discusses the short interest in the Magnificent Seven, which includes seven of the most valuable publicly traded U.S. companies. It raises questions about who might be left to buy these megacap names as their valuation reaches extremely stretched levels.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article primarily focuses on the financial relevance of the Magnificent Seven companies and their market performance. It does not mention any extreme events or their impacts.
Public Companies: Apple Inc. (AAPL), Microsoft Corp. (MSFT), Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN), Nvidia Corp. (NVDA), Meta Platforms Inc. (META), Tesla Inc. (TSLA)
Key People:
Reported publicly:
www.marketwatch.com 
