Home » the performance of the Magnificent 7 was justified, other opportunities in the AI ​​From FinanciaLounge

the performance of the Magnificent 7 was justified, other opportunities in the AI ​​From FinanciaLounge

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the performance of the Magnificent 7 was justified, other opportunities in the AI ​​From FinanciaLounge

© Reuters. Jennison Associates: performance of the Magnificent 7 justified, other opportunities in AI

Experts analyze the strengths and prospects of stocks exposed to growth after the recovery of 2023 and the good start of 2024. A revolution just beginning

US stocks in 2023 were dominated by titoli growth, led by the group of the “Magnificent Seven” (Apple (NASDAQ:), Microsoft (NASDAQ:), Alphabet (NASDAQ:), Amazon (NASDAQ:), Nvidia, Tesla (NASDAQ:), Meta), and as the 2024 many investors are wondering whether the extraordinary performance is deserved and, more importantly, whether it is sustainable. To provide an answer, Jennison Associatesaffiliate of PGIM specializing in growth equity, underlines the importance of considering the market trend and the macroeconomic context since 2020. The markets have been shaken by a series of extraordinary events, from the pandemic, to quantitative easing, from the wars in Ukraine and the Middle East to tensions with China, without forgetting theinflation and the most restrictive monetary policy cycle seen in a generation.

PESSIMISM OF 2022 REVERSED IN 2023

In 2022, inflation and the cost of money began to rise, lowering the risk tolerance, leading companies with minimal cash flows and high valuations to dramatically underperform, as well as those that had benefited disproportionately from pandemic-induced demand. The analysis of Jennison Associates judges the pessimism of the time to be too extreme and not justified by the fundamentals, a view in fact reversed in 2023, when many of these companies have benefited from the depressed ratings and expectations of improvement in profitability in the short and medium term…

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** This article was written by FinanciaLounge

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