They Are Not All Magnificent’: Wall Street Veteran Points Out 2 Vulnerable Magnificent 7 Stocks

In a recent conversation on CNBC, Yardeni stressed concerns surrounding tech giants like Apple Inc. (NASDAQ:AAPL) and Tesla Inc. (NASDAQ:TSLA).

His analysis suggests a fragmentation within the ranks of the Magnificent Seven. “I think we are getting some splitting here among the Magnificent Seven, they are not all that magnificent,” he remarked.

Exposure To China

Yardeni observed that many companies with significant exposure to China are coming to realize that the Chinese economy may be experiencing a slowdown, and consumer purchasing patterns are not what they used to be.

Specifically, Apple, which derives 20% of its revenue from China, experienced a 24% drop in its iPhone sales within the country this year.

The AI Angle

Yardeni also highlighted the evolving narrative around artificial intelligence (AI) and its impact on these companies. “Apple hasn’t repeated the AI mantra too often,” Yardeni stated. The expert also underscored Apple’s retreat from the self-driving car market.

Conversely, the anticipation around Nvidia Corp.‘s (NASDAQ:NVDA) upcoming convention in San Jose, CA, presents a buoyant outlook for the AI and semiconductor sectors.

“I think that will continue to be a positive theme for the technology area and definitely the semiconductor area,” Yardeni asserted, emphasizing the growing divergence within the tech sector, especially among the Magnificent Seven.

Irrational Exuberance?

Yardeni observed a mix of rational and potentially irrational exuberance among investors.

“If we are looking at the 1990s, which was the last time we talked about exuberance, I don’t think we are at 1999, just yet,” he noted.

This comparison suggests that while there is noticeable exuberance in the market today, Yardeni believes it has not reached the levels of irrational exuberance and speculative investment that characterized the period leading up to the dot-com bubble burst in 2000.