What is the expectation for the Magnificent Seven in 2025
Overall, analysts acknowledge the strong performance and potential of the "Magnificent Seven," but also point out the high valuations and potential risks. Growth expectations are generally based primarily on AI growth.
Our expectation is for a correction in the coming months and sharply higher share prices for the long term. This is based on the fact that Mag7 was able to benefit from full wind in its sails last year. Expectations are tremendously high which raises the possibility of a slight disappointment. We already saw this on Wednesday night when the Fed came out with its interest rate policy. Tesla dropped about 10% in a few hours. After a rise of tens of percent, this is only a modest correction.
For the continuation of the upward trend, one must be alert to whether Donald Trump can indeed weaken his promises and start fully implementing his America First policy. In addition, the US economy is growing excellently and inflation and employment remain around target. Reason for the Fed to pause interest rate cuts for a while and most likely reduce them in the coming year.
The bar of expectations is sky-high and the stock price has skyrocketed. The possibility of an intermediate correction is therefore high.
For the long term, expectations are excellent. They are the leading companies in the industry of the future and developments are happening at lightning speed.
Timing is very important now.
Below is the most likely scenario from our algorithm. First half of 2025 the Mag7 may correct about 15% to rise about 40% from there to the late 2025 price target at $70.
Conclusion
The Magnificent Seven can be tracked through an ETF. You then invest in the seven companies that call the shots in U.S. markets. These superstars are under enormous pressure as expectations are very high. After a fantastic year with a 70% rise, there are some challenges ahead. The Fed has made the first move and it remains to be seen whether Donald Trump can start implementing his America First policy immediately without obstacles. Developments in AI are moving forward, though.
If you can take a beating then Mag7 participants are expected to be a very valuable part of the portfolio. For the first half of 2025, we expect a difficult phase so the conclusion is that you should definitely follow Mag7. But be careful about getting in because technically Mag7 could go back about 15%. Getting in at that point can be very profitable for the short term and long term.
Disclaimer: Investing involves risk. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts' own insights and experiences. They are therefore for educational purposes only.