Has Tesla Fallen from the Magnificent Seven? Tesla, once a pillar of the renowned Magnificent Seven, has hit a rough patch, prompting analysts to question its standing among the tech giants.
In the previous year, the Magnificent Seven—comprising Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—saw remarkable gains. However, this year has been starkly different, especially for Tesla, which has lagged significantly behind.
Following Friday’s trading, Tesla closed the week with a 6.7 percent decline. Year-to-date, Tesla’s shares have plummeted nearly 34 percent.
Since its peak in 2021 at $1.23 trillion, Tesla’s market cap has tumbled by roughly 58 percent. As of Friday, it holds a market cap of $519.9 billion, placing it as the 13th most valuable US company and the 15th globally.
According to Art Hogan, chief market strategist at B Riley Wealth, Tesla no longer fits the bill as part of the Magnificent Seven. He stated, “That’s been happening since arguably October of last year, and I think that [the] Mag Seven … counted for a great deal of the gains in the S&P 500 over the course of 2023. That has not been the case in 2024.”
Tesla’s challenges began last year, marked by safety recalls, federal investigations, and slowing growth. Concerns have also risen regarding Elon Musk’s leadership, with investors questioning his focus on other ventures such as X and Neuralink.
Wells Fargo analyst Colin Langan’s recent prediction of zero growth in Tesla’s sales volume for 2024 and a potential drop in 2025 has further added to Tesla’s woes. Langan described Tesla as a “growth company with no growth.”
Moreover, the rise of Chinese competition, with BYD outselling Tesla in the final quarter of last year, has posed a significant challenge to the Texas-based company.
If Tesla were to exit the Magnificent Seven, potential replacements include drug maker Eli Lilly, Berkshire Hathaway, and major credit card companies like Visa and MasterCard. These contenders could expand the Magnificent Seven beyond the tech sector, signaling a shift in the composition of this elite group.
