Europe’s top seven tech stocks posted stronger growth in the first three months of 2024 compared to the much-lauded US group Magnificent 7, eToro data shows.
The European ‘Magnificent 7’, comprising ASML, SAP, Adyen, RELX, Infineon, STMicroelectronics and Capgemini, achieved 15 per cent growth, outperforming the seven US tech giants, which rose 12 per cent.
The seven great American stocks – Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla – dubbed for their enormous value and growth in 2023, are worth more than the stock markets of the United Kingdom, Japan, France, China and Canada combined.
Stampede: Europe’s ‘Magnificent 7’ tech stocks have outperformed their US competitors in 2024
The seven heavy hitters helped lift the S&P 500 19 percent last year, while the index would have risen just 5 percent without their contribution.
The companies account for nearly a third, 29 percent, of the S&P 500’s value.
While the Mag 7 has certainly proven to be a solid investment, returning 106 percent in 2023, eToro data indicates that in 2024, European tech stocks are so far offering more attractive margins.
However, over the past five years, the US Mag 7 has generated returns of 291 percent, compared to 160 percent for the EU Mag 7.
The EU Mag 7, like the US version, is made up of technology-based actions. However, these stocks may benefit more, according to eToro, because the European market does not have such technological dominance.
Ben Laidler, global markets strategist at eToro, said: “Europe’s ‘Magnificent 7’ have potentially benefited from a scarcity valuation premium, as the technology and communications sectors only account for 11 percent of the European market. compared to a whopping 40 percent.” In the USA.
“Although European Mag 7s have historically lagged behind their American peers, they consistently outperform the Stoxx 600 and are gaining significant momentum this year.
“At the forefront is semiconductor company ASML, whose shares have risen 50 percent over the past year as its lithography machines are driving massive growth in AI.”
He added: “On the other hand, with Tesla and Apple faltering recently, the American Mag 7 appears to be losing its collective grip on the markets.”
ASML, while by far the most valuable of the EU Mag 7s, is dwarfed by its US Mag 7 competitors.
With a market capitalization of €364 billion ($454 billion), ASML far outperforms the rest of the EU’s Mag 7, €150 billion ahead of the second largest, SAP.
Still, ASML trails even the smallest of the American Mag 7s, Tesla, which has a market capitalization of $492 billion.
The other six in the United States have market capitalizations of more than $1 trillion, with Microsoft being the largest at $3.09 trillion.
Meanwhile, Granolas, the other set of European stocks that are supposed to rival the Magnificent 7, is up just four percent so far this year.
| Stock | year to date | 1 year | 3 years | 5 years |
|---|---|---|---|---|
| ASML | 3. 4% | fifty% | 72% | 459% |
| SAP | 22% | 47% | 46% | 78% |
| RELX | 8% | 27% | 74% | 90% |
| adyen | 24% | 0% | -28% | 116% |
| Infineon | -fifteen% | -eleven% | -10% | 63% |
| STMicroelectronics | -14% | -sixteen% | 19% | 162% |
| capgemini | 9% | 22% | 36% | 100% |
Named after the combined first initials, which stand for Grannnllass, the eleven companies are “internationally exposed quality growth components,” according to Goldman Sachs analysts.
Granolas are made up of GlaxoSmithKline, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oreal, LVMH, AstraZeneca, SAP and Sanofi.
“Granola shares have boosted the Stoxx 600’s long-term gains, but their defensive growth has lagged over the past year as investors have looked for more direct beneficiaries of upcoming interest rate cuts and the economic recovery.” of Europe,” Laidler said.
“While the Granolas offer a diversified and lower-valuation portfolio than the US Magnificent 7, investors may want to look to Europe’s biggest tech players for an alternative way to benefit from global tech growth.”
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