What’s a glitzy investing conference without a little Mag Seven banter?
“The risk is simple — those stocks don’t do well,” Avenue Capital Group founder and CEO Marc Lasry told Yahoo Finance at the Milken Institute Global Conference on Monday.
Lasry was answering a question about the risk of overcrowding into tech names such as Nvidia (NVDA), Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Google (GOOG, GOOGL), Meta (META), and Tesla (TSLA) — aka the Magnificent Seven.
“What has happened is when people are nervous, they invest in things that they know really well and they believe are going to be around,” Lasry added. “But I don’t know what happens in the next year. I do know on the credit side, you’ve got all these opportunities.”
The former co-owner of the Milwaukee Bucks, Lasry has been investing in credit markets for more than four decades, giving him a reported net worth of $1.9 billion.
So suffice it to say, Lasry has seen a few investing cycles and market crazes.
And the Mag Seven could be viewed as a craze.
Altogether, the Mag Seven were responsible for about 37% of the S&P 500’s 10.2% gain in the first quarter, according to data from S&P Global Indices. In 2023, the cohort constituted roughly two-thirds of the S&P 500’s advance.
The optimism on the group reflects profit enthusiasm on everything from Nvidia AI chips to Microsoft’s Copilot productivity tool.
But with investors now more closely scrutinizing the Mag Seven amid higher interest rates, shares have slowed their roll.
Explained Apollo Global Management CEO Marc Rowan, “I’m not in the stock picking business. But very few people come in every day and try to buy 45 or 50 P/E stocks. It’s just not what we do.” (Disclosure: Apollo Global Management is the parent company of Yahoo Finance.)
“I look at the broader trend. We used to have 8,000 public companies. We now have 4,000 public companies,” he added. “People think most of the action is in public markets. 80% of companies over a hundred million of revenue and 80% of employment is in private companies.”
Some top traders shared their views on how to trade the Mag 7 stocks on a new episode of the Opening Bid podcast. You can easily tune in below.
Brian Sozzi is Yahoo Finance’s Executive Editor. He is also the host of the “Opening Bid” podcast. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com. Are you a CEO and want to come on Yahoo Finance Live? Email Brian Sozzi.
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