The Magnificent 7: Tech titans propel S&P 500 to record highs

In a dynamic market where the S&P 500 has soared to record highs, driven by a 38% surge since October 2022, the Magnificent 7 tech giants, including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla, now hold a substantial 29% of the index's market cap. While concerns arise about stretched valuations, their influence on the market is undeniable. The Magnificent 7's growth potential and dominance in AI technology position them to exceed expectations, sustaining the market's momentum despite macroeconomic uncertainties and geopolitical risks.

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By Jonathan Levin

The S&P 500 Index hit an all-time high on Friday, punctuating its 38% return from the trough in October 2022. Much of the exciting rally has reflected an expansion of forward price-earnings ratios, and there's a broad sense that management needs to start putting up the profits to justify current valuations. I suspect that corporations — and seven in particular — are up to the challenge.

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