SpaceX roared into markets this
past week with a valuation of more than $2 trillion, surpassing
two members of Wall Street’s “Magnificent Seven” and raising a
key question: Does the Mag 7 name still fit? And if not, what
should replace it?
The IPO, the biggest in U.S. history, vaulted SpaceX’s value
above two Mag 7 members: CEO Elon Musk’s other company, Tesla
, and Meta Platforms. With trillion-dollar
contenders such as OpenAI and Anthropic waiting in the IPO
wings, the club may soon need a name change, analysts said.
With SpaceX’s arrival, “it becomes very hard to keep using
Mag 7 as the clean shorthand for market leadership because one
of the most important companies in the world would immediately
be outside the label,” said Shay Boloor, chief market strategist
at Futurum Equities.
These groupings are not formal market categories, but
shorthand labels coined by strategists, investors and the media
to capture the hottest big stocks at a given moment. Such
monikers have a long history, ranging from the “Nifty 50” of the
1960s and 1970s to the “Four Horsemen” of the late 1990s dot-com
boom.
The SpaceX IPO has set off a race to devise the next cool
acronym.
One sobriquet gaining traction on X is “MANGOS”, which
stands for Meta, Anthropic, Nvidia, Alphabet,
OpenAI and SpaceX. That grouping is far from standardized, with
some interpreting the “A” as Apple, currently the third
most-valuable U.S.-listed firm.
“We are already referring to it internally and the industry
is picking up on it as well,” said Aga Kuplinska, SVP of product
development at Tidal Financial Group, which helps asset managers
roll out ETFs.
Dan Boardman-Weston, CEO at BRI Wealth Management, is going
another way, suggesting “Magna Atoms” – the Magnificent Seven
plus SpaceX, OpenAI and Anthropic.
The magnificent seven ride
The “Magnificent Seven” term was coined by BofA Global Research
Chief Investment Strategist Michael Hartnett in late 2023 to
describe seven heavyweight technology-related stocks: Nvidia,
Apple, Amazon, Alphabet, Meta, Tesla and Microsoft
.
With an AI boom driving stock markets to record highs and
the sudden appearance of new trillion-dollar companies, the
leaderboard is often in a state of flux.
In a May 22 note, BofA wrote about the “AI Big 10,” adding
Broadcom, Micron Technology and Advanced Micro
Devices to the original seven, reflecting the
semiconductor rally of the past year. That group accounts for
more than 40 per cent of the S&P 500’s weight, according to LSEG data.
The labels have evolved before – from FANG to FAANG to the
Magnificent Seven – each tracking shifts in companies that led
the market.
FANG covered Facebook, Amazon, Netflix and Google.
FAANG added Apple, and Magnificent Seven dropped Netflix while
adding Microsoft, Nvidia and Tesla, each shift reflecting
changes at the top of the market.
“It’s been Mag 7 for several years now. Maybe the markets
are excited for something new,” said Dustin Thackeray, chief
investment officer at Crewe Advisors.
To be sure, not everyone expects the old label to ride off
into the sunset.
“The Magnificent Seven label is not going away,” said Dave
Mazza, CEO of Roundhill Investments. “It is too embedded in how
investors and the media view large-cap tech leadership. What you
will likely see is additive terminology rather than
replacement.”