Forget FAANG and the "Magnificent Seven." It's time for the "AI 5," According to This Analyst.

Wall Street analysts love grouping stocks because it helps investors separate the market's top performers from the rest of the pack. For instance, the FAANG acronym was coined by CNBC financial analyst Jim Cramer in 2017 to describe five of the largest technology companies at the time:

Then in 2023, Bank of America analyst Michael Hartnett named a new group of technology stocks the "Magnificent Seven." Each of them convincingly outperformed the benchmark S 500 index last year. These seven stocks also have something more important in common: Each company is developing artificial intelligence (AI) in its own unique way:

However, the connection to AI might not be enough to keep this band together. Most of the Magnificent Seven stocks opened 2024 with more upside. The exception was Tesla, which plunged 23% in January alone. CNBC's Cramer thinks Tesla should be booted from the Magnificent Seven, and Glen Kacher from Light Street Capital thinks the group needs to be entirely reconstructed.

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Source Fool.com