The Magnificent Seven stocks — Amazon.com (AMZN), Apple (AAPL), Google parent Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA) — generally paused or retreated last week, as small caps and sectors such as industrials, construction, financials and travel took up the slack.
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But this could be constructive. The Magnificent Seven stocks had hefty November gains, with many looking extended even if they were technically in buy zones. So a pause for several days or even weeks could forge more-attractive entries.
Currently, Microsoft and AMZN stock are in buy zones. Nvidia and Meta stock have fallen just below buy points. Apple stock is closing in on its own buy point. Tesla stock is not far from an early entry. Google stock still has a handle buy point, but has fallen below a key level.
Nvidia and Microsoft are at the forefront of the AI boom, but Meta, Google and Amazon are making their own AI push. Tesla claims it’ll be a big AI player. Apple hasn’t stressed AI, though CEO Tim Cook has said the company is “investing quite a bit.”
Just because these Magnificent Seven stocks are in or near buy zones doesn’t mean investors have to take advantage. With the market rally broadening out, investors may want diversify away from megacaps.
Amazon stock, Microsoft, Nvidia and Meta Platforms are on IBD Leaderboard. MSFT stock is on the IBD Long-Term Leaders list. Nvidia stock, Meta and Microsoft are on the IBD 50. Microsoft stock is on the IBD Big Cap 20.
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Microsoft Stock
MSFT stock hit a record 384.30 on Wednesday, but reversed lower. Shares finished the week down 0.8% to 374.51. That’s still in range of a 366.78 cup-base buy point. Microsoft stock is 8.6% above the 50-day line, the first time its been within 10% since the Nov. 10 breakout. So it’s no longer extended. Still, investors might want to see a little longer pause, perhaps finding support at the 21-day line, before buying or adding shares.
The relative strength line, which tracks a stock’s performance vs. the S&P 500 index, is still near record highs. The RS line is the blue line in the charts provided.
Microsoft earnings and sales growth have accelerated modestly for the past three quarters.
Amazon Stock
Amazon stock edged up 0.2% to 147.03, lagging the major indexes but still rising for a sixth straight week. AMZN stock is just above a 145.86 consolidation buy point, according to MarketSmith analysis. Shares are now 9% above a rising 50-day line. A slightly longer pause, with the 21-day line catching up, would be constructive.
The RS line is holding near 52-week highs.
Nvidia Stock
NVDA stock fell 2.1% to 467.65, following a 3.1% decline in the prior week. Shares have undercut a 476.09 double-bottom buy point as well as the 21-day line. A move above those levels would be actionable, though it’s possible that Nvidia stock will test its 50-day/10-week lines.
There have been a number of down days in the past couple of weeks, with a few more in late October. There’s only been one up day in above-average volume since the end of August. So the Accumulation/Distribution Rating is a worst-possible E.
Over the past several quarters, Nvidia earnings growth has gone from -50% to -33% and -20% to up 429% and 593%. Sales gains have turned from -17%, -21% and -13% to up 101% and 206%.
While Nvidia is the clear AI chip leader, others seek to challenge that dominance. Microsoft and Amazon have recently unveiled their own AI chips to lessen their dependence on Nvidia GPUs. Nvidia rival Advanced Micro Devices (AMD) will hold an Advancing AI event on Wednesday.
Meta Stock
Meta stock fell nearly 4% to 324.82 last week, dropping just below the 326.20 consolidation buy point. That’s still a valid entry, though investors might wait to see Meta Platforms move a little higher, above the 21-day line. On the flip side, a 50-day test isn’t far away.
Earnings have turned from -52% to 168% in just three quarters, with revenue shifting from -4% to 23%.
Magnificent Seven: Apple Stock
Apple stock edged up 0.7% to 191.24 last week. Shares are working on a 192.93 cup-with-handle buy point. The handle is only 2% deep, so a larger pullback, perhaps to the fast-rising 21-day line, could be constructive.
AAPL stock has a $2.974 billion market cap. That’s the world’s highest valuation, though fell Magnificent Seven stock and Dow Jones component MSFT isn’t far behind at $2.783 billion. Shares have never closed with a $3 trillion valuation.
Apple earnings growth has slowly accelerated over the past three quarters to 13% in the September-ended fiscal fourth quarter, but sales have fallen vs. a year earlier for the past four quarters.
Tesla Stock
Tesla stock rose 1.4% to 238.83 last week, the only Magnificent Seven stock to outpace the S&P 500. Shares pulled back from Wednesday’s intraday high of 252.75, but rebounded slightly from the 50-day on Friday. A move above that level, which coincided with a trendline, would offer an early entry. TSLA stock has an official 278.98 double-bottom buy point.
The RS line for Tesla sock has bounced a little over the past month, but is still trending lower from July’s 2023 highs.
On Thursday afternoon, Tesla delivered its first Cybertruck EVs, handing over a dozen. The EV giant also released estimated prices and battery ranges, which appeared to be slightly disappointing.
Tesla earnings have slumped in 2023, tumbling 37% in Q3 vs. a year earlier, amid heavy and ongoing price cuts and discounts. Revenue could fall vs. a year earlier in 2023. Analysts see a growth rebound next year, but have slashed 2024 estimates throughout 2023.
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Google Stock
GOOGL stock slumped 3.5% to 131.86 last week, falling below the 50-day line. The search giant still has a 139.42 cup-with-handle buy point. But Google stock has a number of high-volume down days, including Thursday and Friday. Its Accumulation/Distribution Rating is a dismal D-.
The RS line for GOOGL stock has slumped to a four-month low.
Google earnings growth has picked up from -19% and -11% to 17% and 42%. Sales gains have improved from 1% to 3%, 7% and 11% over that seven.
Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
