2024 has been the year of the Magnificent Seven. After becoming the go-to moniker for describing America’s most dominant companies last year—eclipsing FANG and its variants—the Mag-7 continued to gain in popularity and performance this year.

The Roundhill Magnificent Seven ETF (MAGS) surged 66% since the start of 2024, while attracting nearly $1 billion of inflows.

Each of the Magnificent Seven components has soared this year, from a gain of 20% for Microsoft to a 180% bonanza for Nvidia.

And with the exception of Microsoft, every Mag-7 stock has delivered stronger returns than the Invesco QQQ Trust (QQQ) and the SPDR S&P 500 ETF Trust (SPY)—both of which are up around 29% this year.

Apple, Alphabet, Amazon, Tesla, and Meta are up 30%, 38%, 52%, 66%, and 80%, respectively.

A Look at the Widespread Impact 

Of course, the Mag-7’s influence extends far beyond just the MAGS ETF.

Almost every broad U.S. stock market ETF—including QQQ and SPY—has a hefty weighting in the Magnificent Seven stocks. For instance, the group makes up a third of SPY and a whopping 45% of QQQ.

What’s more, the group’s impact on returns for those ETFs has been greater than even their large weightings would suggest.

The Mag-7 accounts for half of the S&P 500’s return this year, even though it only represents a third of the index.

At the same time, it accounts for almost three-quarters of the Nasdaq-100’s 2024 return despite representing less than half of that index.

AI Fuel

The stellar gains for the Mag-7 this year have been fueled by the boom in artificial intelligence.

Nvidia, which has nearly tripled this year, has led the charge, but every Mag-7 member is benefiting from the enthusiasm about AI.

Apple is set to release a flurry of AI features in its new iPhones, while Microsoft, Amazon and Alphabet are racing to offer AI applications and computing resources to their customers.

Meta, the maker of the wildly-popular social apps Facebook and Instagram, is also investing heavily in AI to keep its offerings as engaging as possible; while Tesla is using AI to develop autonomous vehicles.

2025 Outlook 

Looking ahead, it will be tough for the Mag-7 to replicate 2024’s gains next year, but the same could have been said at the end of last year following a massive rally in the stocks. 

The shares certainly aren’t cheap—Tesla is trading at a forward P/E of 130—but high valuations alone typically aren’t a catalyst for a reversal. 

On the other hand, any signs that the AI spending boom is stalling could sap momentum in the group, while faster economic growth under a new Trump administration could accelerate the rally in the shares.