Following a prolonged slump, tech stocks rebounded vigorously in the past year, with the heralded “Magnificent Seven” leading the charge. These top performers in the Nasdaq Composite in 2023 swept the industry with remarkable gains averaging over 111%, showcasing a remarkable comeback. However, as we stepped into 2024, a shift occurred within this cohort, leading to a subgroup emerging from the septet, now known as the “Fab Four.”
Exploring the “Fab Four” Stocks
With the limelight on this new quartet, it’s time to dissect what distinguishes them from the pack.
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The Dominance of Nvidia
Leading the charge is Nvidia, with its stock soaring 81% year-to-date. Renowned for its pioneering work in graphics processing units (GPUs) that revolutionized video gaming and AI processing, the company commands 95% of GPUs in data centers, the heart of AI operations. Apart from its standout position in machine learning, Nvidia’s fiscal performance speaks volumes, with a 265% revenue surge and a whopping 769% rise in net income for the fourth quarter of 2024.
Meta Platforms: The Data Dynamo
Benefiting from its treasure trove of social media data, Meta Platforms leverages AI to bolster user experience and refine targeted advertising. Its innovative generative AI tools have streamlined ad creation, delivering exceptional results. The introduction of LLaMA (Large Language Model Meta AI) and advanced advertising strategies fueled a 25% revenue uptick and a 201% spike in net income for Meta Platforms in Q4.
Amazon’s Strategic AI Moves
Amazon, initially deemed a laggard in adopting generative AI, surprised skeptics with initiatives like Bedrock and Titan on its AWS platform. Its foray into generative AI with Amazon Q and substantial investments in Anthropic AI underscore its commitment. In Q4, Amazon notched a 14% increase in net sales and a remarkable 34x surge in net income, solidifying its prowess in e-commerce, cloud services, and digital advertising segments.
Microsoft’s AI Integrations
Microsoft’s pivotal role in the AI revolution is evident through its partnerships with OpenAI and seamless integration of generative AI into its software suite. Azure’s offering of premier AI models highlights its market strength. The company’s forward trajectory looks promising as it continues to innovate in this dynamic realm.