10 Stocks Retail Investors Craved in 2024: A Look at the Magnificent Seven and Beyond
Tuesday, Dec 31, 2024 11:19 am ET
5min read In 2024, retail investors showed a strong appetite for technology and growth stocks, with the Magnificent Seven stocks leading the way. These seven stocks—Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms, and Tesla—lived up to their name by delivering big gains in 2023 and maintaining solid year-to-date gains in the final weeks of 2024. But which specific factors contributed to their popularity, and how did analyst recommendations and sentiment play a role in their performance?
Strong Performance and Growth Prospects
The Magnificent Seven stocks' strong performance in 2023 and solid year-to-date gains in 2024 likely attracted retail investors looking for winning stocks. For instance, Apple's stock delivered returns of 33% in 2024 as of Dec. 30, driven by upticks in sales of iPhones, iPads, and MacBooks, as well as double-digit percentage year-over-year growth in its services business. Similarly, Microsoft's stock price increased by 16% in 2024, reflecting its strong financial performance and growth prospects.
Artificial Intelligence Integration and Sector Diversification
Many of these companies are at the forefront of artificial intelligence (AI) technology and its integration into their products and services. For example, Apple's AI suite of generative AI features and Microsoft's Azure cloud services are expected to drive growth in 2025. Additionally, these companies operate in high-growth sectors such as technology, consumer electronics, and e-commerce, further contributing to their popularity among retail investors.
Positive Analyst Sentiment and Recommendations
Analyst recommendations and sentiment played a significant role in the performance of these stocks in 2024. The majority of analysts covering these stocks have a strong buy or buy recommendation, indicating a positive outlook for their future performance. For instance, Apple has a median 12-month price target of $250, suggesting potential upside in 2025. Microsoft's analysts expect revenue and earnings growth to accelerate in fiscal 2025, further boosting investor confidence.
Beyond the Magnificent Seven: Nvidia and Microsoft Expected to Lead AI Growth in 2025
Wedbush Securities has identified Nvidia and Microsoft as main winners of a rise in artificial intelligence investments predicted to define 2025. The research firm predicts a 25% rise in technology company prices for the year, driven by less regulation and more acceptance of powerful AI technologies. Nvidia's central influence in the AI scene, with its processors serving as essential infrastructure for developments, makes it a strong contender for retail investors' portfolios.
In conclusion, the popularity of the Magnificent Seven stocks among retail investors in 2024 can be attributed to their strong performance, growth prospects, AI integration, sector diversification, and positive analyst sentiment. As retail investors continue to seek promising investment opportunities in 2025, these factors will likely remain crucial in their decision-making process.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
