Episode Details

In 2023, seven stocks (Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla) increased their collective market capitalization by $5.1 trillion, accounting for close to 60% of the increase in market cap of all 6658 stocks. At the end of 2023, these seven companies had a market cap of $12.2 trillion, greater than the market cap of all listed stocks in China, the second biggest equity market in the world. In this session, I look at three reasons for the success of the Mag Seven, ranging from a correction for the beating they took in 2022, extraordinary business economics (growth & profitability) and a shift to winner-take-all (or most) economics in many industries. I close the session by valuing all seven companies, necessitated by the fact that I own all seven (bought at different points in time), and concluding that while all five are close to fairly valued, two (Nvidia and Microsoft) are over valued. That may be either because I don't have the imagination to see the possibilities of AI or because investors are exaggerating its potential to deliver profits.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/MagSeven.pdf
Blog Post: https://aswathdamodaran.blogspot.com/2024/02/the-seven-samurai-how-big-tech-rescued.html
Intrinsic Valuations:
Amazon: https://pages.stern.nyu.edu/~adamodar/pc/blog/Amazon2024.xlsx
Apple: https://pages.stern.nyu.edu/~adamodar/pc/blog/Apple2024.xlsx
Alphabet: https://pages.stern.nyu.edu/~adamodar/pc/blog/Google2024.xlsx
Meta: https://pages.stern.nyu.edu/~adamodar/pc/blog/Meta2024.xlsx
Microsoft: https://pages.stern.nyu.edu/~adamodar/pc/blog/MSFT2024.xlsx
Nvidia: https://pages.stern.nyu.edu/~adamodar/pc/blog/NVIDIA2024.xlsx
Tesla: https://pages.stern.nyu.edu/~adamodar/pc/blog/TeslaJan2024DIY..xlsx

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