Challenging the Magnificent 7: 3 Stocks on the Rise

Stocks to buy

While the benchmark S&P 500 index is up nearly 20% since the start of this year, the equal-weight version of the index is only up 6.2%. This is because the Magnificent 7 stocks, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA), continue to play a major role in the 2023 bull run.

The growing divergence between the prominent tech stocks on Wall Street and the broader S&P 500 is prompting comparisons to the inflated valuations seen during the dot-com era. Many analysts have noted recently that the surge in the Magnificent 7 stocks resembles past bubbles. Now they are raising concerns about the risk for late-arriving investors. 

Many Wall Street experts are now urging investors to look for other stocks rather than Magnificent 7. Here are three emerging candidates that could join this exclusive club.

Broadcom (AVGO)

Source: Sasima /

Broadcom (NASDAQ:AVGO) is a technology company specializing in the design, development and supply of semiconductor and infrastructure software solutions. Their diverse product portfolio includes storage adapters, controllers and ICs, along with wireless, wired and optical products. Moreover, Broadcom offers mainframe and enterprise software, emphasizing automation, systematic cybersecurity and factory automation. 

Most recently, Broadcom announced the integration of artificial intelligence features into a new version of one of its key networking chips. This enhancement is designed to facilitate more efficient data movement within data centers.

The company also announced in late November that it closed the $69 billion deal to buy VMware after it received a green light from regulators in China. VMware is seen as an important asset due to its multi-cloud services which cater to all types of applications. 

AVGO stock is up over 66% this year as investors look to increase their exposure to companies that are seen as key providers of critical artificial intelligence infrastructure. The company has a market capitalization of $435 billion.

Eli Lilly (LLY)

Source: Vi

Eli Lilly (NASDAQ:LLY) is a major U.S. pharmaceutical company with its products sold in roughly 125 countries. The company is known for a range of products across various therapeutic areas.

Eli Lilly has a market capitalization of over $550 billion. Its shares rose 60% this year as the company became a major market player in the weight loss market. Eli Lilly’s drug, Tirzepatide, is selling under brand names Mounjaro and Zepbound for type 2 diabetes and weight loss, respectively. Treatments aim to improve glycemic control and promote weight loss.

The medication works by mimicking the action of the gut hormones GLP-1 and GIP. In effect this causes improvements in feelings of satiety, blood sugar levels and slowing down the stomach’s emptying process. Morgan Stanley (NYSE:MS) forecasts that the obesity market will exceed $56 billion in 2030.

Last month, Eli Lilly said that it generated $1.41 billion in Mounjaro sales in the Q3 2023. This was easily ahead of analyst expectations. Especially considering that it only generated $97.3 in Q3 2022. The substantial revenue growth is attributed to increased demand and higher realized prices, which resulted from decreased use of savings card programs.

Oracle (ORCL)

Source: Jonathan Weiss /

Oracle (NASDAQ:ORCL) engages in providing a wide range of cloud, software and hardware solutions to businesses and organizations globally. The company focuses on offerings to enhance efficiency and productivity for its clients. 

The company has a market cap of $320 billion. More recently, Oracle has increased its focus on AI products, helping its shares to rise nearly 45% year-to-date. Under the leadership of the renowned innovator and the current CTO Larry Ellison, Oracle entered into lucrative agreements with companies like Nvidia for access to capacity on its Generation 2 Cloud to train generative AI models.

Oracle said its cloud infrastructure revenue grew 66% in Q1 2024. This places it easily ahead of its competitors in the hyperscale cloud infrastructure market. 

On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Shane Neagle is fascinated by the ways in which technology is poised to disrupt investing. He specializes in fundamental analysis and growth investing.

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