By Emily Dattilo

The Magnificent 7 stocks have had a stellar year but in one manner, they fell short.

The group -- which boasts Apple, Nvidia, Microsoft, Alphabet, Amazon.com, Meta Platforms, and Tesla -- averaged a gain of 65% this year, compared with an average of 111% last year, according to Dow Jones Market Data. The Mag 7 has made up 57% of the S&P 500's market cap gain this year versus 65% last year.

The good news: That means other stocks had a chance to perform well, and names like Palantir Technologies, Vistra, Walmart, AppLovin, and MicroStrategy found themselves as top performers.

That being said, 2025 could still be the year of big tech amid a less restrictive regulatory environment under Trump and the continuation of the artificial intelligence frenzy, argued Wedbush analyst Dan Ives.

"The start of this $2 trillion+ of AI spending all began with the Godfather of AI Jensen and Nvidia as they remain the only game in town with their chips the new gold and oil," he wrote on Monday.

"The stalwart cloud/hyper scale players in 2025 will continue to play an instrumental role in this key phase of the AI Revolution being led by Microsoft and now also seeing Google ( GCP) and Amazon (AWS) both finding major cloud and AI momentum into the coming years," he added.

However, there's also a chance the tech stocks could really disappoint, according to 22V Research's Dennis DeBusschere. If job growth has to weaken to slow inflation, that could prompt the yield curve to flatten as recession risk edges higher. That could push the Mag 7 lower because the group tends to outperform when the yield curve steepens, and falls when it flattens.

That being said, it's still been a stellar year, and the Mag 7 had quite a high bar. If the past is any precedent, that bar will climb even higher in 2025 as the artificial intelligence battle blazes on.

Here is a look at the individual stocks, comparing year to date gains to 2023 performance:

Apple

Year to Date Change: 33%

2023 Change: 48%

Apple announced its generative AI software, Apple Intelligence, in June at the World Wide Developers Conference. Since then, Wall Street has been buzzing over the AI opportunity and what it will mean for iPhone sales.

Nvidia

YTD: 177%

2023: 239%

Nvidia gains arrived early this year -- amid booming demand for semiconductors used for artificial intelligence applications -- but since then, the stock has flattened out as investors ponder how quickly the company can ramp up sales of its Blackwell AI chips.

Microsoft

YTD: 14%

2023: 57%

Microsoft has been funneling money into AI efforts to compete with other industry tech giants. Now, investors are waiting to see those dollars pay off.

Alphabet

YTD: 38%

2023: 58%

Google has weathered the changing internet landscape well, and it has an opportunity to add revenue as Gemini, its AI tool, becomes more powerful, according to Barron's Al Root . Other points of strength for the company include its advertising business and cloud unit.

Amazon.com

YTD: 47%

2023: 81%

Amazon has many ways to win, from its giant retail arm that has positioned itself as a place for consumers to both save and splurge, to its Amazon Web Services cloud-computing business that can ramp AI efforts.

Meta Platforms

YTD: 69%

2023: 194%

Meta Platforms is seen as an AI winner, aided by the fact that it relies on its in-house AI models and is developing its own chips, as opposed to needing to acquire or fund an AI start up. Investors will be looking to see those investments pay off in 2025.

Tesla

YTD: 73%

2023: 102%

Tesla has run higher on optimism around robo-taxis, but Trump is largely expected to remove the EV purchase tax credits, which would mean price increases for electric cars. The company is planning to launch a lower-priced model in the first half of 2025.

Write to Emily Dattilo at emily.dattilo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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December 31, 2024 12:50 ET (17:50 GMT)

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