In This Article:
Cracks are forming inside the group of tech stocks known as the Magnificent Seven with several players failing to rise to the occasion and being outshone by the remainder. Threadneedle Ventures Founder Ann Berry outlines why certain Mag 7 members are finding a harder time getting a footing in this environment.
"We're seeing outside punishment relative to the rest of that set, just to be more realistic... Look what we have seen with Apple (AAPL), and I think Apple has experienced two things that the rest of the group are at risk for," Berry tells Yahoo Finance. "Number one, Apple had the courage to shut down its EV business after spending a billion a year for the last decade by trying to develop an electric vehicle. You compare Meta (META) which has wasted over $40 billion on the metaverse... but just because Apple unveiled its bad news in this market, it's being punished very heavily, whereas Meta's been able to regain ground by gaining in other places such as AI
She also shares her investment outlook on stocks like Salesforce (CRM) and Palo Alto Networks (PANW)
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
JULIE HYMAN: It feels like the Mag Seven is already dead, right? And-- in terms of moving as a block, right? And people keep trying to find new cute catchphrases for--
ANN BERRY: Fab Four.
JULIE HYMAN: --the new thing. Yeah, exactly, Fab Four, whatever have you. I mean, what do you think? What do you like in that group? Or do you think that investors are better served by looking outside of that entirely?
ANN BERRY: Julie, here's what I find so interesting about what's happened with this Magnificent Seven group. I think we're now seeing outsized reward for good performance and good outlooks, and we're seeing outsized punishment relative to the rest of that set just for being more realistic. And I'll give you an example. Look what we've seen with Apple. And I think Apple has experienced two things that the rest of this group are at risk for. Number one, Apple had the courage to shut down its EV business after spending a billion a year for the last decade on trying to develop an electric vehicle.
You compare Meta, which has wasted over $40 billion on the metaverse since the end of 2019. But just because Apple unveiled its bad news in this market, it's been punished very heavily. Whereas Meta has been able to regain ground by gaining in other places, such as AI. Similarly, if you look at what's happened to Apple in China, a real fall in iPhone sales in China.