Why then do I propose another revamping of the roster of market leaders? Two reasons \u2013 size and performance. Although neither the Mag 7 nor FAANG titles were based strictly on market capitalization \u2013 otherwise Berkshire Hathaway (BRK.B) would have made the list \u2013 it is certainly a contributing factor. While huge, AVGO\u2019s $572 billion is indeed smaller than TSLA\u2019s $666 bn. That gives AVGO a smaller weight in the S&P 500 (SPX). But thanks to the recent re-weighting of NDX that de-emphasized the weights of its then-largest members, the recent stellar performance of AVGO now gives it a larger weight in NDX than either META or TSLA. Considering how the leading performers in both indices have been Nasdaq-listed megacaps, it is not unfair to focus on NDX over the more broad-based SPX.<\/p>\n\n\n\n
The performance-based argument for AVGO is quite revealing, though. It has hardly been a secret that NVDA has been a key trigger for the equity market\u2019s recent advance. But did you realize that AVGO\u2019s performance has recently kept pace with NVDA\u2019s? Indeed, since equities began their rocket-ship rally on November 1st<\/sup>, through Friday, AVGO was up 44.6%, just below NVDA\u2019s 45.9%. Both are eye-watering changes, and well above NDX\u2019s 20.2% move in that timeframe. Heck, when we wrote last week that the broad markets were essentially following NVDA, we failed to recognize that AVGO was keeping pace. So was AMD, by the way. Meanwhile, TSLA is up \u201conly\u201d 5.7%. That is hardly a shabby return in just over 10 weeks, but it pales behind the other Mag 7 members, all of whom are up by double-digit percentages. <\/p>\n\n\n\n Source: Bloomberg<\/em><\/p>\n\n\n\n Zooming in on the above graph\u2019s legend, we see:<\/p>\n\n\n\n Perhaps it is hasty to suggest a substitution right now. We will learn TSLA\u2019s Q4 earnings after the close on Wednesday. There is of course the possibility that they will be greeted positively \u2013 the recent underperformance implies that investor expectations for a post-earnings move are subdued \u2013 but each of the last three earnings reports were greeted with falls of just less than -10%. If we see a 10% rally, like we did a year ago, then the performance gap could narrow significantly. But if not, then this piece could be quite timely. We\u2019ll know more on Thursday, but I\u2019ll go out on a limb and propose the roster move now. <\/p>\n","protected":false},"excerpt":{"rendered":" Who remembers FAANG?\u00a0 For a few years it was the small group of stocks that led the market’s advance.\u00a0 That nomenclature fell by the wayside when market leadership changed during the 2022 bear market and has since been replaced by the so-called “Magnificent Seven”.\u00a0 Those stocks have indeed performed remarkably, but I believe that it is time for a change to the roster.<\/p>\n","protected":false},"author":4,"featured_media":189144,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6,8,9,22,26,3],"tags":[15439,44,4919],"contributors-categories":[13576],"class_list":{"0":"post-201432","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-stocks","11":"category-text-articles","12":"category-traders-insight","13":"tag-magnificent-seven","14":"tag-stocks","15":"tag-tech-stocks","16":"contributors-categories-interactive-brokers"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"\nNormalized Performance Since October 31st<\/sup>, 2023: AAPL (white), AMZN (blue), GOOGL (red), META (purple), NVDA (aqua), TSLA (orange), AVGO (magenta), NDX (green)<\/em><\/strong><\/h3>\n\n\n\n
![\"Normalized](\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/Picture2-9-1100x512.png\")
<\/figure>\n\n\n\n![\"Zooming](\"\/campus\/wp-content\/uploads\/sites\/2\/2024\/01\/Picture1-19.png\")
<\/figure>\n\n\n\n